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RIGHTS SHARE OFFER DOCUMENT

IFIC Bank Limited

RIGHTS SHARE OFFER DOCUMENT 22 March 2017

Rights Offer of 563,821,907 Ordinary Shares of BDT 10.00 each at an issue price of BDT 10.00 each at par totaling BDT 5,638,219,070.00 offered on the basis of 1(R): 1 (i.e. one Rights Share for every existing one share held) on the record date for the entitlement of rights shares.

RECORD DATE FOR ENTITLEMENT OF RIGHTS OFFER

12 April 2017

Opens on: 31 May 2017 Subscription

Closes on: 29 June 2017 Within Banking Hours (Both Days Inclusive)

CREDIT RATING STATUS

Rating Year Long Term Short Term

Entity Rating 2015 AA2 ST-2

Date of Rating 23 June 2016

Validity 30 June 2017

Rating Assigned By: Credit Rating Agency of Bangladesh Limited (CRAB)

MANAGER TO THE ISSUE

ICB CAPITAL MANAGEMENT LIMITED

Green City Edge (5th & 6th Floor),89, Kakrail, Dhaka-1000, Bangladesh Ph: 8300555 ,8300367, 8300387, 8300395, 8300421. Fax: 8802-8300396

E-Mail: [email protected], Website: www.icml.com.bd

FULLY UNDERWRITTEN BY

AFC Capital Ltd. IIDFC Capital Limited Saiham Sky View Towerv(11th floor), 45 Bijoy Nagar, Eunoos Trade Centre ( Level 7), 52-53, Dilkusha C/A,

Dhaka-1000. Dhaka.

Agrani Equity & Investment Ltd. Jamuna Bank Capital Management Limited

Swantex Bhaban (4th floor), 9/I, Motijheel, Dhaka-1000 Hadi Mansion (3rd Floor), 2, Dilkusha C/A, Dhaka-

1000.

Bengal Investments Limited Janata Capital and Investment Limited

Eastern Nibash (3rd Floor), 138, Gulshan Avenue, Gulshan- 48, Motijheel (3rd floor), Dhaka1000

2, Dhaka-1212.

Beta One Investments Limited Lanka Bangla Investments Limited

Green Delta AIMS Tower (Level – 4), 51-52, Mohakhali City Center | Level - 24 | 90/1 Motijheel C/A,

C/A, Dhaka-1212. Dhaka - 1000

BLI Capital Limited NBL Capital & Equity Management Ltd.

Eunoos Centre (Level-18), 52-53 Dilkusha C/A, Dhaka- 5 Rajuk Avenue, Printers Building,(8th Floor), Dhaka

1000 BRAC EPL Investment Ltd. PLFS Investments Limited

Concord Baksh Tower(8th floor), Plot No. 11/A, Road No. Paramount Heights (13th Floor), 65/2/1 Box Culvert

48, Block-CWN(A), Kemal Ataturk Avenue, Gulshan-2, Road, Purana Paltan, Dhaka-1000.

Dhaka-1212.

CAPM Advisory Limited Rupali Investment Ltd.

Tower Hamlet (9th Floor), 16 Kemal Ataturk Avenue, Shadharan Bima Tower (7th floor),

Banani C/A, Dhaka-1213. 37/A Dilkusha C/A,

Dhaka-1000

EBL Investments Limited SBL Capital Management Ltd.

59 Motijheel C/A, Dhaka-1000. 02, DIT Avenue (Extension), 3rd Floor, Motijheel C/A,

Dhaka-1000.

EXIM Islami Investment Ltd. Sonali Investment Ltd.

Printers Building (5th floor), 5 Rajuk Avenue, Motijheel Sara Tower (11th Floor), 11/A, Toyenbee Circular Road,

C/A, Dhaka-1000. Motijheel C.A., Dhaka-1000

mailto:[email protected]

http://www.icml.com.bd/

FAS Capital Management Ltd. Sonar Bangla Capital Management Limited Zahed Plaza(5th floor), 30 Gulshan Avenue North C/A, Paramount Heights (8th Floor), 65/2/1, Box Culvert

Dhaka-1212. Road, Purana Paltan, Dhaka-1000

NRB Equity Management Limited

Suite - 602, 603, (6th floor) Al-Raji Complex, 166-167, Shaheed Syed Nazrul Islam Sarani, Purana Paltan, Bijoy

Nagor, Dhaka-1000

Southeast Bank Capital Services Limited

Eunoos Centre (Level-9), 52-53 Dilkusha C/A, Dhaka-

1000

First Security Islami Capital & Investment Ltd. Swadesh Investment Management Limited

Al-Amin Center(12th floor), 25/A Dilkusha C/A, Dhaka- Suite 01, Level 11, Unique Trade Center (UTC),

1000. 8 Karwan Bazar, Dhaka.

ICB Capital Management Limited Unicap Investments Limited

Green City Edge (5th & 6th floor), 89 Kakrail, Dhaka-1000. Noor Tower (4th Floor) 73, Sonargaon Road, Dhaka-

1205

BANKERS TO THE ISSUE

IFIC Bank Limited Investment Corporation of Bangladesh (ICB)

IFIC Bank Limited Head Office

IFIC Tower, 61, Purana Paltan, G.P.O. Box: 2229, Dhaka-1000, Bangladesh Tel: 9563020, I-Phone PABX: 09666716250 Fax: 880-2- 9554102, Swift: IFIC BD DH

E-mail: [email protected]; Website: www.ificbank.com.bd

As per provision of the Depository Act, 1999 and regulation made there under, rights shares shall only

be issued in dematerialized condition. An applicant must apply for allotment of rights shares mentioning

his/her Beneficiary Owner (BO) Account number in the application form.

mailto:[email protected]

http://www.ificbank.com.bd/

TABLE OF CONTENTS

Particulars Page

No.

Particulars Page

No.

The rights offer 02 Public listed companies under common

management 18

Risk factors and management’s perception

about the risks 03 Classified information & underwriters 18

Utilization of fund raised by initial public

offering (IPO) 07 Name of the underwriters 18

Utilization of previous rights issue fund 07 Directors’ subscription in the rights offer 20

Purpose of the rights issue 08 Terms and conditions of the rights issue 23

10 (ten) years information regarding AGM

held and Dividend declared by the bank 08 Declaration by the Issue Manager (Form-A) 25

Highlights of the bank 08 Declaration by the Underwriter (Form-B) 26

Financial highlights of previous 5 (five)

years 09 Declaration by the Auditors (Form - C) 28

Market price per share of the bank for last 6

(six) months 10 Due diligence certificate (Form - D) 29

Existing products & services rendered by

the bank 11 Auditors’ Report in pursuance of Section-

135(1) and Paragraph 24(1)(3) and 25 of

part-II of the Third Schedule of the

Companies Act, 1994

30

Length of time during which the issuer has

carried on business 14 Independent auditors’ report to the

shareholders, audited financial statements 39

Implementation schedule 15 Credit Rating report 156

Quantity of shares held by each director on

the date of rights share offer document

(ROD)

15 Letter of offer for Rights Issue to the

shareholders 175

Beneficial owners holding shares 5% or

above 15 Form of Acceptance and Application for

Shares, Form-A 176

Composition of shareholding position of the

bank 16 Form of Renunciation, Form-B 179

Details of directors, managing director and

secretary 16 Application by Renounce(s), Form-C 180

DEFINITION AND ELABORATION OF THE ABBREVIATED WORDS AND TECHNICAL TERMS USED IN THE RIGHTS SHARE OFFER DOCUMENT

ACRONYM ELABORATION

AGM : Annual General Meeting

Allotment : Allotment of share

ALCO : Asset Liability Committee

BSEC : Bangladesh Securities and Exchange Commission

Commission : Bangladesh Securities and Exchange Commission

CSE : Chittagong Stock Exchange Limited

DSE : Dhaka Stock Exchange Limited

EPS : Earnings per share

ICB : Investment Corporation of Bangladesh

IFIC : International Finance Investment and Commerce Bank Limited

Issue : Rights Issue

Issuer : IFIC Bank Limited

Issue Manager : ICB Capital Management Limited

ICT : Information and Communications Technology

ICML : ICB Capital Management Limited

NAV : Net Asset Value

NOCFPS : Net Operating Cash Flow Per Share

Offer Price : Rights Share price of IFIC Bank Limited

Rights Issue Rules :

Bangladesh Securities and Exchange Commission (Rights Issue) Rules, 2006

RJSC : Registrar of Joint Stock Companies & Firms

Securities : Shares of IFIC Bank Limited

Securities Market : The securities market of Bangladesh

Sponsor : The sponsor shareholders of IFIC Bank Limited

Stockholder : Shareholder

Subscription : Application Money

Page | 1

IFIC BANK LIMITED Head Office: IFIC Tower, 61, Purana Paltan, G.P.O. Box: 2229, Dhaka-1000, Bangladesh

Tel: 9563020, I-Phone PABX: 09666716250 Fax: 880-2- 9554102, Swift: IFIC BD DH

RIGHTS ISSUE OF SHARES

22 March 2017

Dear Shareholder(s)

We are pleased to inform you that the Board of Directors in its 676th meeting held on 20 June 2016 recommended to issue Rights Shares at 1(R) : 1 i.e. 1 (one) Rights Share for 1 (one) share held at a price of BDT 10.00 (at par) per share after considering the 12.00% Stock Dividend for the year 2015. The Board’s recommendation was approved by the shareholders of the Bank in the 39th Annual General Meeting (AGM) held on 14 July 2016. After considering the 12.00% Stock Dividend the total proposal for 563,821,907 Ordinary Shares of BDT 10.00 each at an issue price of BDT 10.00 each at par totaling BDT 5,638,219,070.00 offered on the basis of 1(R): 1 (i.e. one Rights Share for every existing one share held) on the record date. The purpose of issuance of Rights Shares is to strengthen capital base of the Bank in order to comply with the Basel III capital accord, directed by Bangladesh Bank. After issuing this proposed Rights Shares of BDT 5,638,219,070.00 total paid-up capital of the Bank will increase to the extent of BDT 11,276,438,140.00 from BDT 5,638,219,070.00.

Having satisfactory operation, the Bank has earned a consolidated Operating Income of BDT 4,263,746,494.00

for the period from 1 January 2016 to 30 June 2016. This success has been achieved due to efficient conduct of

investible funds by the management under the direction of the Board of Directors as well as patronization and

active participation of all our valued shareholders and customers.

To maintain further growth and increase the capital base of your Bank, we hope you would come forward with

your full support and assistance to make the offer a success.

A self-explanatory Rights Share Offer Document prepared in the light of the Bangladesh Securities and Exchange

Commission (Rights Issue) Rules, 2006 is enclosed herewith for your kind information and evaluation.

On behalf of the Board of Directors

Sd/- M Shah Alam Sarwar Managing Director & CEO

Page | 2

THE RIGHTS OFFER

Status of the Bank

International Finance and Investment Company Limited was established in 1976 at the instance of the

Government of the People’s Republic of Bangladesh as a joint venture finance company. Government of

Bangladesh held 32.75% ordinary shares and the remaining 67.25% were held by the sponsors and general public.

When the Government decided to open up banking in the private sector in 1983, this finance company was

converted into a commercial bank and incorporated in Bangladesh as a bank company in the same year under the Companies Act 1913 (now 1994) under the name and style “International Finance Investment and Commerce Bank Limited” also known as “IFIC Bank Limited”.

The Bank started its banking operation since 24 June 1983. During this span of time the Bank has been widely

acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates,

including the top rated corporate borrowers for forward-looking business outlook and innovative financing

solutions. IFIC Bank Limited provides banking services to the customers in compliance with the provisions of the

Bank Companies Act, 1991 as amended and Bangladesh Bank’s directives issued from time to time. Thus, within

this period of time it has been able to create an image of “Growing Together” for itself and has earned significant

reputation in the Country's banking sector.

The Bank was listed with Dhaka Stock Exchange Limited on 1986 and Chittagong Stock Exchange Limited on 1997.

The Bank has 130 branches and 59 own ATM booths with 68 ATMs as on 30 June 2016. The Bank has an Off-

shore Banking Unit (OBU) located at Dhaka and also two subsidiary companies namely IFIC Securities Limited

and IFIC Money Transfer (UK) Limited (hereinafter together referred to as "the Group"). Moreover, the Bank has

investment in two joint venture/associate companies in abroad namely Nepal Bangladesh Bank Limited, Nepal

and Oman International Exchange LLC, Oman. The Bank has also investment in another company in abroad

namely NIB Bank Limited, Pakistan.

The Rights Issue

The Board of Directors of the Bank in its 676th

meeting held on 20 June 2016 has recommended to raise paid-up

capital by issuing of rights shares on paid-up capital after considering 12.00% stock dividend for year 2015 at

1[R]:1 ratio i.e. 1(one) Rights Share for 1 (one) existing share held on the record date for entitlement of rights

shares.

Later in the 39th

Annual General Meeting held on 14th

July 2016 shareholders approved to issue rights shares at

BDT 10.00 per share on the basis of 1 (one) new share for 1 (one) existing shares held on the record date for the entitlement of rights shares. After considering the stock dividend, the issue size of the Rights Offer will be 563,821,907 Ordinary Shares of BDT 10.00 each, totaling BDT 5,638,219,070.00 offered to existing shareholders on the record date. The purpose of issuance of Rights Shares is to strengthen capital base of the Bank in order to comply with the Basel III capital accord, as per guidelines of Bangladesh Bank. Upon considering this rights shares, total paid-up capital of the Bank will increase to BDT 11,276,438,140.00 from BDT 5,638,219,070.00.

Issue Price The Issue Price per share has been fixed up in the 39

th Annual General Meeting of the Bank held on 14 July 2016

at BDT 10.00 per share totaling BDT 5,638,219,070 (after considering 12.00% stock dividend for the year 2015) on the basis of 1[R]:1 i.e. 1(One) rights share for every 1 (one) existing share held on the record date subject to approval of the Bangladesh Securities and Exchange Commission (BSEC).

Page | 3

RISK FACTORS AND MANAGEMENT’S PERCEPTION ABOUT THE RISKS

An investment in capital market involves a high degree of risk. The Bank is operating in an industry involving

both external and internal risk factors having direct as well as indirect effects on the investments made by the

investors. All investors should carefully consider all the information in this Rights Offer Document, including the

risk factors, both external and internal, and management perception thereabout enumerated hereunder before

making an investment decision. If any of the following risks actually occur, their business, results of operations

and financial condition could suffer, the trading price of their share could decline, and investors may lose all or

part of their investment.

Interest rate risk:

Interest Rate Risk is the current or potential risk to the interest rate sensitive assets and liabilities of a bank’s

balance sheet as well as the off-balance sheet items arising out of adverse or volatile movements in market interest rate. Volatile movements of market interest rate adversely affect the value of interest rate sensitive assets and liabilities that consequentially results in the loss of equity value also affect the earnings of the bank.

Management Perception

The interest rate risk is mainly managed as part of IFIC Bank’s Asset Liability Committee (ALCO). The Asset

Liability Management (ALM) Desk is an independent unit within the Treasury Division. The desk meticulously

monitors and analyzes cash flows and cash positions, balance sheet gaps, daily profit and loss, economic trends,

investment options, arbitrage opportunities, business growth, liquidity and places the facts and findings before the

ALCO with its recommendations on a regular basis. The ALCO comprising the senior management of the bank

has been established to make important decisions relating to liquidity, interest rate and balance sheet management.

The ALCO is headed by the Managing director. ALCO meeting is held once or more in every month to analyze,

review and formulate strategies in order to manage the same.

Establishing asset/liability pricing policies; receiving and reviewing reports on liquidity risk, market risk and capital management; and reviewing liquidity contingency plan for the bank are amongst some of the major

responsibilities of the ALCO which can mitigate the interest rate risks. Moreover, Bank always segregated both

the interest rate sensitive assets and liabilities into different time buckets to find the asset/liability mismatch. The duration gap analysis is also being done on quarterly basis.

Industry Risk:

The Bank is operating in a highly competitive market. Some of the competitors have more resources than those of the IFIC Bank Limited. It is difficult to predict in advance the move of the competitors in the coming years.

The Bank is always cautious in offering its products and services at competitive terms and conditions which in turn minimizes its industry risk exposure.


The Bank has always been careful in offering its products and services at competitive terms and conditions which in turn minimizes its industry risk exposure. The management also continues to focus on more diversification of the loan book.

Exchange Rate Risk:

Exchange rate fluctuation may reduce the profitability of IFIC Bank. Exchange rate risk arises from exchange rate

movements, which may affect the earning of the Bank from its foreign exchange open position taken from time to time. If exchange rate is increased against local currency opportunity will be created for generating more profit

and the opposite may happen as well.


IFIC Bank foreign exchange risk remains at minimum level as all of its foreign trade & remittance transactions

are carried out on behalf of the customers. All Nostro accounts are reconciled on monthly basis and outstanding

entries are escalated to concerned departments and reported to higher management for immediate settlement. As

per directives of Bangladesh Bank, the bank has formulated a treasury manual which has been implemented for

managing foreign exchange risks. The functions of treasury front office, mid office and back office have been

Page | 4

segregated. The operational guidelines have also been formulated specifying the roles and responsibilities of front,

mid and back office so that various foreign exchange transactions can be conducted according to the policy guidelines of the Bangladesh Bank and the risks can be measured, monitored and mitigated. Treasury continuously

monitors price movements of foreign exchange and uses various hedging techniques to manage its open position

in such a way that minimizes risk and maximizes return.

Market Risk:

The financial industry of Bangladesh is currently one of the fastest growing in the country and is increasingly

becoming competitive. Especially the entrance of nine more banks in the industry in 2013 has made the competitive atmosphere more intense. Strong marketing and brand management will be required to increase the bank’s customer base.


IFIC Bank focuses on pursuing unexplored market niches in the small and medium enterprise business and

individual level home loan/mortgage loan which hitherto remained largely untapped within the Country. The Bank

has incorporated double bottom approach in its operation, first is making profit by mobilizing fund from urban to

rural areas and second is performing social responsibility by creating an entrepreneurial class. The bottom line

approach taken by the bank makes them the market leader in the banking industry.

Technology-related risk:

As the banking industry is becoming more and more technology dependent the risks deriving from technological use is increasing day by day. The bank may be exposed to risks such as virus attack, system collapse, system hacking, unauthorized electronic fund transfer, etc.


ICT risk management is embedded with organizational internal control system which is used as part of the

management control for risk management in the organization. This management control emphasizes both business

control and technological control which support business requirement and governance. Business and technological

controls are involved in the policies, processes and systems. Internal control and the audit process control the

entire range of interactive transactions and internal transactions across organization as well as monitor and manage

risks including business and ICT risks.

The Bank has integrated technology with its business and is continuously upgrading its technological aspects to

keep pace with modern banking arena. The Bank has taken initiative to integrate different software with Core

Banking Software – Misys. For effective centralization, the Bank has engaged KPMG to implement Electronic

Document Management System (DMS) using Microsoft SharePoint. With its centralized online banking solution,

the Bank is now able to serve its customers from anywhere any time. The Bank has already launched debit card,

credit card, prepaid card, SMS banking, web-based remittance facility and automated emailing customer’s

statement. Bangladesh Automated Cheque Processing System (BACPS), Bangladesh Electronic Fund Transfer

Network (BEFTN), Real Time Gross Settlement (RTGS) has also been established as per guidelines of

Bangladesh Bank.

The Bank has upgraded its data center during the previous year with high-end servers and networking equipment

to accommodate growing business transactions with adequate security. Besides the data and network securities,

various physical security measures like, data center access control, environmental security, fire prevention, etc.

have been maintained adequately. The bank has also setup disaster recovery site with advanced technology which

can be readily accessed in case of any disaster of the data center so that the customer services are not hampered.

Risk related to potential changes in global or national policies:

A financial institution’s ability to operate a profitable business is directly related to the monetary and fiscal

policies of the country at any given time. Imposition of restrictive monetary and/or fiscal policy by the government

at any time may affect a company’s profitability. Again, changes in the existing global or national policies can have either positive or negative impacts on the bank.

Page | 5

Every company operates under the economic policies formulated and imposed by the political government. The government tends to reshape these policies time to time for the sake of greater interest of the country’s economy.

Sometimes those changes in existing policy or any future policy framework adversely affect smooth operation of such companies.


The management of the bank is always concerned about the prevailing and upcoming future changes in the global or national policy and shall respond appropriately and timely to safeguard its interest.

Operational Risk:

The operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people and

systems or from externalities. It broadly focuses on the risks arising from the people, systems and processes through which a company operates. It also includes other categories such as fraud, forgery and non-compliance on legal matters.


The internal control system of IFIC Bank Limited ensures that all the necessary policies, guidelines and manuals are in place and all concerns are following the same strictly and meticulously including Department Control

Function Check List (DCFCL). To monitor overall effectiveness of the internal control system the Management

Committee (MANCOM) regularly reviews the policies & procedures as well as the structure assigning clear responsibility, authority and reporting relationship.

The Internal Control & Compliance (ICC) Division of the Bank is working independently to evaluate the Internal

Control System of the Bank so as to ensure good governance, transparency & accountability. The ICC Division

is conducting comprehensive internal audit of the branches as well as different divisions/departments of Head

Office ongoing basis. The Division reviews the activities of branch’s Internal Control Unit (ICU) continuously

through different control processes to minimize irregularities/ lapses, to prevent fraud/ forgery and to control

existing/emerging risks. The significant deficiencies identified by the audit team are placed before the senior

management as well as the Audit Committee of the Board. Audit Committee of the Board regularly monitors the

functions of Internal Control & Compliance Division with their necessary suggestions/recommendations and also

reports to the Board of Directors from time to time. Compliance culture is developed by strict adherence to

statutory & regulatory requirement and also bank’s own policy & procedures.

Credit Risk:

Some of the customers or obligators may fail to meet the terms of any contract or otherwise fail to perform as agreed which will in turn reduce the profit of the Bank, decreasing shareholders’ earning.


Considering the key elements of credit risk, the Bank has segregated duties of the officers/executives involved in

credit related activities. Separate division for corporate, SME and retail has been formed which are entrusted with

the duties of maintaining effective relationship with the customers, marketing of credit products, exploring new

business opportunities etc. for transparency in the operation during the entire credit period i) Credit approval

committee, ii) Credit administration department, iii) Recovery and Impaired asset management have been set up.

In addition to the above, credit division carries out thorough assessment before approving any credit facility. The

risk assessment includes borrower risk analysis, financial analysis, industry analysis, and historical performance

of the customer. Loan administration department ensures compliance with all legal formalities, completion of all

documentation, and security of the proposed credit facility and finally disburses the amount. The sales team reports

to their line management; the credit division reports directly to deputy managing director (risk management),

while the loan administration reports to the head of division. The above management system has not only ensured

segregation of duties and accountability but also helps to minimize the risk with the credit portfolio.

Page | 6

Liquidity Risk: Liquidity risk arises when a bank fails to generate cash to cope with any decline in liabilities or increases in assets. The liquidity risk generally arises from funding in long term assets by short term liabilities.


The Bank has established liquidity management framework that is well integrated with the bank’s risk management process. The liquidity risk management strategy is in accordance with the bank’s risk tolerance. There is a sound process for identifying, measuring, monitoring and controlling liquidity risk. This process includes a framework for comprehensively projecting cash flows arising from assets, liabilities and off-balance sheet items over an appropriate set of time horizons. Periodic stress testing is being done on a regular basis showing no significant adverse impact.

The liquidity risks are measured and monitored by the Treasury Division of the bank which maintains the liquidity position based on historical requirements and anticipated future requirement sources of fund, asset quality and earning capacity. ALCO has been monitoring liquidity risk regularly.

Potential or Existing Government Regulations:

The Bank operates under the specific guidelines laid down by Bangladesh Bank, Securities and Exchange

Commission (SEC) and other regulatory authorities. The Company also operates under Companies Act 1994 and other related regulations, Bank Companies Act 1991, Income Tax Rules 1984, Value Added Tax (VAT) Act 1991

and Value Added Tax (VAT) Rules 1991. Any abrupt change of the policies made by the regulatory authorities may adversely affect the business of the Bank.

Management Perception:

Unless any policy change negatively and materially affects the industry as a whole, the business of the Bank is expected not to be affected significantly. However the management is always concerned about the potential policy

changes and their impact and takes precautionary measures to prevent untoward situation where applicable.

Potential Changes in Political & Economic Condition:

Changing economic conditions may affect the demand for the type of finance offered by the Bank, Downturn of economic activity or uncertainty may result in a downturn in demand for loan funds in the industry.


Generally, this risk applies to every financial institution in the country but they are normally mitigated by being aware of the circumstances and taking appropriate action in time. IFIC Bank has always kept abreast of changing business environments and this is evidenced by its good financial performance in the past. IFIC Bank’s performance has been steady during periods of political turmoil and natural calamities. On the other hand, political turmoil and the disturbance are bad for the economy as a whole and so also for the Bank.

Asset Quality Risk:

Changes in market liquidity and/or interest rate expenses Bank’s business to the risk of loss, which may, in extreme cases, threaten the survival of the institution.


Emphasis has been given so that the level of balance sheet risks are effectively managed appropriate policies and

processes are established to control and limit these risks and proper manpower are available for evaluating and

controlling these risks. The Assets Liability Committee (ALCO) of the Bank monitors balance sheet risks and

liquidity risks of the Bank. The committee reviews Country’s overall economic position, Bank’s liquidity position,

ALM ratios, interest rate risk, capital adequacy, deposit advance growth, cost of deposit & yield on advance, R.E.

gap, market interest rate, loss provision adequacy and deposit lending pricing strategy and takes appropriate

decisions in this respect.

Money laundering risk

Page | 7

Money laundering risk:

Prevention of Money Laundering is now a burning issue it is the process of concealing the source of illegally obtained

money. Effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the

integrity of markets and of the global financial framework as they help mitigate the factors that facilitate financial abuse. Money laundering risk is a risk of incurring loss due to inadequate due-diligence resulting reputational,

operational, legal and concentration risks involving significant cost.

Management’s perception

“Guidelines on Prevention of Money Laundering” and “Policy for Combating Financing of Terrorism” has been

formulated for strict compliance as per directives of Bangladesh Bank. The Chief Anti-Money Laundering

Compliance Officer (CAMLCO) regularly submits status report to the competent authorities as per regulatory

requirement in respect of hundi activities, abnormal transactions, Suspicious Transaction Report (STR), Cash

Transaction Report (CTR), Know Your Customer (KYC) Procedure, Transaction Monitoring Report, Structuring

Monitoring Report, Half Yearly Report on Self-Assessment Reports of branches & independent testing procedure

conducted by ICC Division and similar other areas. The bank has been complying with all the rules and regulations

on Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) issues. Bank continuously arrange

training on money laundering for imparting skills among the executives and officers for efficient prevention of money

laundering through identifications of suspicious/ unusual transactions.

History of Non-Operation, if any:

Any interruption in the operations of the Bank affects the Bank’s image as a going concern. Failure to ensure uninterrupted operation reduces profitability and in the long run weakens the fundamentals of IFIC Bank.


There is no history of disruption in the operation of the Bank.

DATE OF OPENING AND CLOSING OF SUBSCRIPTION DATE

Subscription opens for the rights shares offer on 31 May 2017 and subscription closes for the rights shares offer on

29 June 2017.

UTILIZATION OF FUND RAISED BY INITIAL PUBLIC OFFERING (IPO)

IFIC Bank Limited went for Initial Public Offering (IPO) in the year 1986 to raise the paid up capital of BDT

7,800,000.00 of the Bank and thus the ability to augment business. It is further stated that the fund raised through

public offering was fully utilized for meeting the said purpose and growth in the Bank’s business in the usual course

of banking operation.

Sd/- Sd/-

Dilip Kumar Mandal FCA M. Shah Alam Sarwar

Chief Financial Officer Managing Director & CEO

Date: 1 August 2016

UTILIZATION OF PREVIOUS RIGHTS ISSUE FUND

IFIC Bank Limited went for Rights Issue in the year 1989 which was completed in 1990 to raise the additional paid

up capital of BDT 44,000,000 to strengthen the capital base of the Bank and augment business expansion. It is further

stated that the Bank has utilized the entire amount raised through rights issue for business augmentation and further

growth in the Bank’s business in the usual course of banking operation.

Sd/- Sd/-

Dilip Kumar Mandal FCA M Shah Alam Sarwar


Date: 1 August 2016

Page | 8

PURPOSE OF THE RIGHTS ISSUE

With the increase of loans and advances, the risk-weighted asset of the Bank is also increasing every year.

Hence, to meet the capital adequacy for regulatory requirement and to strengthen the capital base of the Bank

as per Basel – III, the Board of Directors and the Shareholders of the bank have decided to raise its paid-up

capital by BDT 5,638,219,070.00 through issuance of Rights share of 563,821,907 Ordinary Shares of

BDT10.00 each at an issue price BDT 10.00 each at par at a ratio of 1(R): 1 i.e. one Rights Share for every

existing one share held. This will facilitate the long-term business growth of the Bank through expansion in

credit portfolio resulting in profitability growth of the Bank.

Sd/- Sd/-

Dilip Kumar Mandal FCA M Shah Alam Sarwar Chief Financial Officer Managing Director & CEO

Date: 1 August 2016

10 (TEN) YEARS INFORMATION REGARDING AGM HELD AND

DIVIDEND DECLARED BY THE BANK

Sl No AGM Number Date of Holding AGM Accounting Year Cash Dividend Stock Dividend

1 30th AGM 25.10.2007 2006 Nil 24%

2 31st AGM 28.05.2008 2007 Nil 100%

3 32nd

AGM 28.10.2009 2008 Nil 30%

4 33th

AGM 26.07.2010 2009 Nil 25%

5 34th

AGM 24.08.2011 2010 Nil 27%

6 35th

AGM 11.07.2012 2011 5% 25%

7 36th

AGM 12.05.2013 2012 Nil 10%

8 37th

AGM 01.06.2014 2013 Nil 15%

9 38th

AGM 17.06.2015 2014 Nil 15%

10 39th

AGM 14.07.2016 2015 Nil 12%

Sd/- Sd/-

A. K. M. Mozharul Hoque M Shah Alam Sarwar Company Secretary Managing Director & CEO

Date: 1 August 2016

HIGHLIGHTS OF THE BANK

1. The Bank was incorporated as International Finance and Investment Company Limited on 08 October

1976 as a finance company. Thereafter, in 1983 this finance company was converted into a commercial

bank in the same year under the Companies Act 1913 (now 1994) under the name and style “International

Finance Investment and Commerce Bank Limited”.

2. IFIC Bank started its commercial banking on 24 June, 1983 and has completed 33 successful years of

banking operation.

3. The Bank was listed with Dhaka Stock Exchange Limited in 1986 and Chittagong Stock Exchange

Limited in 1997.

4. The authorized capital of the Bank is BDT 20,000 million.

5. The Bank has been paying reasonable dividend to its shareholders.

6. The Bank has a network of 130 branches.

7. Total equity structure of the Bank as on 30 June, 2016 is shown below:

Page | 9

Amount in BDT

Shareholders' Equity 30-Jun-16 31-Dec-15 Paid up capital 5,034,124,170 5,034,124,170

Statutory reserve 4,486,284,969 4,232,499,880

Other reserve 237,917,879 286,435,173

Surplus in profit and loss account 3,371,972,342 2,817,321,961

Total shareholders' equity 13,130,299,360 12,370,381,184

Number of Shares of BDT 10.00 each 503,412,417 503,412,417

NAV per Share 26.08 24.57

FINANCIAL HIGHLIGTHS OF PREVIOUS 5 (FIVE) YEARS

2015 2014 (*) 2013 (*) 2012 (*) 2011 (*)

Paid up capital 5,034,124,170 4,377,499,280 3,806,521,120 3,460,473,750 2,768,379,000

Total shareholders' 12,370,381,184 11,198,630,869 9,448,810,783 7,820,544,069 6,808,903,420 equity

Profit after Tax 1,057,141,202 1,765,080,258 1,629,809,652 1,133,840,736 831,791,382

Number of Shares 503,412,417 437,749,928 380,652,112 346,047,375 276,837,900

Face Value per Share 10 10 10 10 10

NAV per Share 24.57 25.58 24.82 22.60 24.60

EPS 2.10 3.51 3.72 2.98 2.40

Net Operating Cash flow (3.13) 11.38 22.87 20.29 12.83 per Share

Dividend Cash: Nil Cash: Nil Cash: Nil Cash: Nil Cash: 5%

Stock 12% Stock 15% Stock 15% Stock 10% Stock 15% (*) Previous years' figure have been rearranged/restated to conform to current (most recent) years' presentation.

Price Determination of IFIC Bank Limited

Sl No. Valuation Methods Offer Price (BDT)

1 (a) Price based on Net Asset Value per share as on 31 December, 2015 (with 24.57 Revaluation Reserve)

1 (b) Price based on Net Asset Value per share as on 31 December 2015 (without Revaluation Reserve) 24.26

2(a) Earning Based Value per share based on market PE as on May, 2016 37.29

2 (b) Earning Based Value per share based on sectoral PE as on May, 2016 16.84

Method-1(a) Price based on Net Asset Value per share (with Revaluation Surplus)

Particulars Amount

Paid up Capital 5,034,124,170

Statutory Reserve 4,232,499,880

General Reserve 155,071,397

Revaluation Reserve Against Securities 41,391,939

Revaluation Reserve Against Fixed Assets 115,314,704

Foreign Currency Transaction Reserve (25,350,388)

Surplus in Profit and Loss Accounts/ Retained Earnings 2,817,321,961

Total Shareholders' Equity 12,370,373,663

Number of shares 503,412,417

Net Asset Value per share as per Audited Report as on 31 December 2015 24.57

Page | 10

Method-1(b) Price based on Net Asset Value per share (without Revaluation Surplus)

Particulars Amount

Paid up Capital 5,034,124,170

Statutory Reserve 4,232,499,880

General Reserve 155,071,397

Foreign Currency Transaction Reserve (25,350,388)

Surplus in Profit and Loss Accounts/ Retained Earnings 2,817,321,961

Total Shareholders' Equity 12,213,667,020

Number of shares 503,412,417

Net Asset Value per share as per Audited Report as on 31 December 2015 24.26

Method 2: Historical Earnings based value per share as on 31 December 2015

MARKET PRICE PER SHARE OF THE BANK FOR LAST 6 (SIX) MONTHS

Date

Market Performance

Face Value(BDT)

Price(BDT)

31-Jan-16 10.00 20.40

29-Feb-16 10.00 19.4 0

31-Mar-16 10.00 18.20

30-Apr-16 10.00 16.70

31-May-16 10.00 17.60

30-Jun-16 10.00 15.90

Average Market Price per Share 10.00 18.03

Source: DSE Website

Financial Year No. of ShareNet Profit

after Tax Weight

Weighted Average

Profit

2015 503,412,417 1,057,141,202 25.89% 273,655,618.32

2014 437,749,928 1,765,080,258 22.51% 397,317,767.44

2013 380,652,112 1,629,809,652 19.57% 319,016,080.47

2012 346,047,375 1,133,840,736 17.79% 201,759,996.11

2011 276,837,900 831,791,382 14.24% 118,409,734.75

Total 1,944,699,732 6,417,663,230 100.00% 1,310,159,197.08

No. of shares 503,412,417.00

2.60

DSE overall P/E as on May, 2016 14.33

(a) Earning Based Value per share 37.29

6.47

(b) Earning Based Value per share 16.84

Weighted average EPS (1,310,159,197/503,412,417)

If we consider Sectoral P/E as on May, 2016

Page | 11

EXISTING PRODUCTS & SERVICES RENDERED BY THE BANK

Corporate Banking: IFIC Bank offers comprehensive Corporate Banking solution to large corporate, multinationals and institutional

clients to meet the diverse financial needs of growing corporate sector of the country. With our expertise,

innovation and dedication, our skilled Relationship Managers are offering a broad spectrum products and services

including flexible & structured financial, advisory & operational support to our corporate customers. Our prime

focus is to build and maintain long-term mutually beneficial relationship with the corporate clients, and being a

part of their journey towards development and growth. The Bank offers flexibility of options to afford the client

the right financial products and services, designed particularly to meet immediate needs, individually conceived

and professionally realized. Diversified and exiting array of corporate financing of the Bank tailored in the form

of various funded and non-funded facilities to assist manufacturers, traders and service industries which includes

by not limited to the followings:

Working Capital Finance: Business Enterprises engaged in manufacturing/ trading/ service business are eligible

to avail Working Capital Loan to meet day to day expenses for processing of manufacturing and selling product

& services. Working capital products include both fund and non-fund based products. Fund-based working capital

products include secured overdraft, cash credit, packing credit, short-term loans payable on demand. Non-fund

based products include Letter of Credit (L/C) Cash & Back to Back, Bank guarantees, performance guarantees

and bid bonds are also supporting the business of our customers. Industrial & Project Finance: IFIC Bank provides project loan to set up /BMRE of long-term infrastructure and

industrial projects/ service unit on the basis of debt and equity rather than the balance sheets of project sponsors. The Bank has been financing Term Loan (Industrial) facility for establishing new project and/or BMRE of various

projects in the sectors viz. textile, garments, power, steel, telecom, pharmaceuticals, packaging, consumer

products, health, CNG refueling, Real estate. Term Finance: IFIC Bank is offering short term & mid-term finance to meet emergency financial needs of its

project/business. Trade Finance: For Import- a) Letter of Credit - Business Enterprises can avail Non-funded facility for import /

procurement of raw materials, machinery, equipment, merchandise item. b) Loan against Imported Merchandize

(LIM) - Business Enterprises engaged in import merchandise can avail working capital for retirement of import

documents. c) Loan against Trust Receipt - Business Enterprises engaged in import of merchandise can avail

working capital for retirement of import documents. Furthermore, for Export: a) Pre-shipment finance - Back to

Back L/C, EDF, ECC, SOD (Working Capital Finance), Packing Credit. b) Post-shipment finance - Foreign

Documentary Bills Purchase, Inward Documentary Bill Purchase. Lease Financing: IFIC Bank has been providing lease finance facility to its customer for acquisition of

manufacturing and service equipment for all major industrial sectors. IFIC offers financing vehicles/ CNG

conversion/ refueling plant/ sea or river transport, capital machinery/ plat/ equipment/ lift / generator/ boiler, construction equipment/ computer for IT education center, medical equipment etc. Syndication Finance: IFIC Bank along with other commercial banks has been financing large scale projects under

syndication arrangement to raise and meet huge credit need of a company. To cater the need of leading corporate

house IFIC Bank has been raising fund from the banking sector on behalf of the customer through syndication arrangement. Bank Guarantee: Bank’s guarantee officers bid bond, performance guarantee, advance payment guarantee for

helping contractors/suppliers to participate in different tenders and performance guarantee respectively. Moreover, Bank’s offer security bond on behalf of customers in favour of customs authorities, utilities companies, shipping agent, airlines, IATA etc.

SME Banking:

SME Loan Products:

Easy Commercial Loan: To meet business requirement of individual business enterprises (other than public

limited company) against pledge of financial instruments i.e. FDR, ICB Unit Certificate, WEDB, NFCD, PSS Account, MIS & Share Certificates & any other Govt. security eligible for credit facilities. Transport Loan: To purchase of Road/Water transport for commercial use individual, business enterprises (other than public limited company) engaged in transport business at least two years’ experience are eligible for transport loan.

Page | 12

Commercial House Building Loan: Individual, business enterprises (other than public limited company) having commercial plot are eligible for construction of commercial building. Contractor's Loan: Individual, business enterprises (other than public limited company) engaged in construction and supply business are eligible for secured over draft to execute work order awarded by Govt./Semi Govt. & Autonomous Bodies. Bidder's Loan: Individuals, business enterprises (other than public limited company) engaged in construction

and supply business can avail Bidder's loan for issuing Payment Order/Demand Draft etc. to participating in tenders. Working Capital Loan: Business Enterprises (other than public limited company) engaged in manufacturing/ trading business are eligible to avail Working Capital Loan to meet day to day expenses for processing of manufacturing and selling product. Letter of Guarantee: Business Enterprises (other than public limited company) engaged in construction, supply

and other business enterprise can avail Letter of Guarantee facility for issuing guarantee to participate tenders, execute job order and to meet any other obligation. Trade Finance: SME trade finance products are Letter of credit, Loan against Imported Merchandize (LIM), Loan against Trust Receipt etc. Muldhan: Any business purpose loan for business enterprises (other than Public Limited Company) incorporated in Bangladesh engaged in manufacturing or trading or service business. IFIC Protyasha (Loan for Women Entrepreneurs): Any business purpose loan for business Enterprises (other

than Public Limited Company) incorporated in Bangladesh own and run by women entrepreneurs (at least 51% share of a business hold by women), engaged in manufacturing/ trading/ service business having minimum 2(two) years successful business experience in the same line of business. IFIC Prantonari (Loan for Grassroots Women Entrepreneurs): Any business purpose loan for Cottage, Micro & Small Enterprise owned & run by grassroots women entrepreneurs involved in manufacturing unit of

jamdani, nakshikatha, boutiques and other handicrafts, service unit of beauty parlor, catering service and other income generating trading activities and those who have no access to financial facilities from banks. IFIC Krishi Shilpo (Loan for Agro-based Industries): The loan product has been designed for Small &

Medium Enterprises engaged in business of General & Aromatic Rice Mill (semi-automatic, automatic), Flour

Mill, Oil Mill, Feed Mill, Milk processing, food and fruit processing unit/ industry and other rural based Agro-

processing industry as declared by Bangladesh Bank. IFIC Shilpa Sahay (Loan for Cottage & Micro Enterprise): Loan product for any Bangladeshi potential

entrepreneurs or group of entrepreneurs (maximum 05) who has the business of Cottage & Micro Enterprise i.e., Pottery, Cane & Bamboo, Handloom, Goldsmith, Handicrafts, Jewelry and other manufacturing, service & trading

business and has minimum 01 (one) years business experience in particular activity or line of cottage & micro

sized business. Green Product: IFIC Green Earth: a) Domestic Bio Gas Plant- For Integrated cow (Hybrid) rearing & setting up of Bio-Gas Plant (Maximum 4.80 Cubic

Meter) and for setting up of Bio-Gas Plant in existing Cattle /Poultry Farm (Maximum 5.00 Cubic Meter). b) Commercial Bio Gas Plant- For setting up Bio-Gas Plant in existing Cattle / Poultry farm to produce electricity through gas generator. c) Vermin compost- To meet the financial needs for purchasing of 2 cows, Vermin, construction of shade and for other expenses to produce Vermin compost Fertilizer for own use/business purpose. d) Finance for Brick Kiln Efficiency Improvement Projects- To setup Hybrid Hoffman Kiln (HHK) or equivalent technology plant and to convert Traditional Fixed Chimney Kiln (FCK) into Improved Zig Zag Brick Kiln. e) Fire Fighting & Safety Equipment Loan- To purchase/ reinstall of firefighting/ fire safety defense equipment’s

like Fire Extinguishers along refill (gas and/ or powder type), masks, blankets, fire hoses, fire beaters, fire alarm,

smoke detector, heat sensor, lock cutters, stretches, ropes etc. Also, to construct/ repair/ reconstruction of overhead and underground water reservoir/ tanks and to purchase/ install water pumps, sprinkler etc. to protect

fire incidents.

Page | 13

SME Deposit Products:

Monthly Income Scheme – Arjon: A special kind of fixed deposit offers flexibility & comfort of having monthly return on investment for SME clients. It offers flexible tenor of 1 year, 2 years, and 3 years with a credit facility up to 90% of deposited principal amount. Monthly Savings Scheme – Joma: A special kind of monthly savings scheme for SME clients with a duration

of 3 years/ 5 years. It offers credit facility up to 90% of deposited principal amount.

Retail Banking

Loan Products:

Home Loan: "IFIC Home Loan" is an attractive home & mortgage based loan facility for all credit worthy

individual of Bangladesh who wish to buy new or used apartment/flat, mortgage their existing house/flat/apartment or construct/ renovate/ extend their existing flat/house and semi pacca building (new or used

or construction or renovation) etc.

Easy Loan: Easy Loan is to serve any personal financial needs. The loan is absolutely hassle free & paid against financial securities. Adult person having an account with IFIC Bank can easily apply for this loan. Consumer Durable Loan: IFIC creates an opportunity to satisfy customers' desire to purchase consumer durables like - computer, television, refrigerator, washing machine, air conditioner, music systems, motor cycle and a lot

of other things by Consumer Durable Loan. The Bank is providing maximum 1.00 lac taka to be repayable in by 12 to 36 monthly installments. Parua (Education Loan): IFIC Bank offers Education Loan that can make a student's dream comes true. The

Bank is providing maximum BDT 8.00 lac (conditions apply) to be repayable in 12 to 48 monthly Installments. Salary Loan: Salary loan of IFIC Bank is only for salaried person of reputed MNCs/ LLCs/ Govt. Employees/

Semi Govt. Employees/ Banks/ Insurance Companies/ Educational Institutions/ Financial Institutions where bank has its own branch network. To meet any personal urgency like education, vacation, marriage, medical expenses,

furnishing of home or any unexpected financial urgency salary loan designed for salaried customers. IFIC Bank

is providing maximum BDT 10.00 lac to be repayable in 12 to 60 monthly installments. Any Purpose Loan: IFIC Any Purpose Loan caters to various needs of salaried people. With minimum

formalities, you can get a loan for an amount up to BDT3.00 lac to be repayable at 12 to 36 monthly installments. Auto Loan: IFIC Bank is providing maximum BDT 40.00 lac as Auto Loan to purchase a car to be repayable in

12 to 60 monthly installments. Marriage Loan: IFIC Bank is providing maximum BDT 3.00 lac to be repayable in 12 to 36 monthly installments for Marriage Loan. CNG Conversion Loan: IFIC Bank offers the best suitable loan for CNG conversion of the vehicle. The Bank is providing maximum BDT 1.00 lac to be repayable in 12 to 36 monthly installments. Medical Loan: IFIC Medical Loan caters hospitalization or other emergency medical needs to salaried people. The Bank is providing maximum BDT 3.00 lac to be repayable in 12 to 36 monthly installments. Holiday Loan: IFIC Bank is providing maximum BDT 3.00 lac as Holiday Loan to be repayable in 12 to 36

monthly installments. Peshajeebi Loan (Professional Loan): IFIC Bank is providing Maximum BDT 10.00 lac (conditions apply) to

Professionals (Doctor/ Engineer/ IT professional/ Management Consultant or any other professionals) as Loan to be repayable in 12 to 48 monthly installments.

Deposit Products:

AMAR Account: It is a unique transactional account where both deposit and overdraft facility is enabled in a

single account. IFIC Bank introduces this type’s account first time in Bangladesh which will ultimately reduce the account operation cost of the customer with numerous benefits in a single account. Savings Account: A regular transactional account offering interest on deposit. It offers VISA Debit Card, 24 hour access to ATMs, wider access to Q-cash ATMs with free of charge, SMS banking facility, and internet banking facility.

Page | 14

Smart Savings Account: It is an interest bearing checking account. It offers VISA Debit Card, 24 hour access to ATMs,

wider access to Q-cash ATMs with free of charge, SMS banking facility, and internet banking facility.

Super Savings Plus - More Money: A special type of savings account, gives monthly return on savings deposit. It offers insurance coverage up to BDT 500,000.00 for accidental death and BDT 50,000.00 for normal death. Interest is calculated on the daily balance and paid at month end.

Current Account: A non-interest bearing checking account which offers VISA Debit Card, 24 hour access to ATMs, wider access to Q-cash ATMs with free of charge, SMS banking facility, and internet banking facility.

Special Notice Deposit - SND Account: A checking account, giving the option to deposit and withdraw money for day to day needs and earn interest on savings deposit. Interest is calculated on the daily balance and paid at month end.

Fixed Deposit Receipt (FDR): A term deposit account, guarantees interest on deposit with flexible tenor of 1M, 3M, 6M & 12 Months. It offers 95% loan facilities.

Pension Savings Scheme (PSS): A type of savings scheme with a duration of 3 years/ 5 years. It offers income tax rebate, credit facility up to 80% of deposited principal amount, and can receive full payment after maturity or option for a pension on monthly basis.

School Savings Plan – A Plus: Easy monthly installment based scheme account for school going students with

flexible tenor of 5 years & 7 years. Scholarship facility up to BDT 5,000 for both SSC & HSC, if the account holder secures 80%/Grade-A+/CGPA 5.00 marks (without forth subject) in the exam.

Monthly Income Scheme – Protimash: A special kind of fixed deposit offers flexibility & comfort of having monthly

return on investment with a flexible tenor of 1 year, 2 years, 3 years. It offers credit facility up to 100%.

Three Years Deposit Plus (3YDP): It can be opened in joint names or in the name of any institutions with a duration of 3 years. It offers credit facility up to 90% of the deposited amount.

Double Return Deposit Scheme (DRDS): It doubles the initial deposit in 10 years. Minimum deposit for this account is BDT 25,000.00 only.

Millionaire Dream Plan (MDP): It offers to be millionaire in 4Y/ 5Y/ 7Y and/or 10 Years with IFIC Bank with flexible installment size of 4Y: BDT 17,930, 5Y: BDT 13,820, 7Y: BDT 9,150, 10Y: BDT 5,705.00 only. Credit facility up to 90% of principal amount but not less than BDT 50,000.00 can be availed. Insurance Coverage up to

BDT 500,000.00 only for accidental death and BDT 50,000.00 only for normal death.

Sanchita - Female Savings Account: An exclusively designed savings account completely dedicated to sophisticated female customers who want to unmet necessities and make life more rewarding.

Card Products: IFIC offers visa debit, credit, prepaid and traveler card for its customers both for domestic and

international uses based on the customer needs.

Other Services: NRB account, SMS Banking, internet banking, Student File Service etc.

LENGTH OF TIME DURING WHICH THE ISSUER HAS CARRIED ON BUSINESS [Rule-8(j)]

IFIC Bank Limited started its journey on 08 October 1976 at the instance of the Government as a joint venture between

the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company.

In 1983 when the Government allowed to open up banking in the private sector, the finance company was converted

into a full fledge commercial bank and incorporated as a public limited company in Bangladesh under the Companies

Act 1913 (now 1994), currently governed under the Bank Companies Act 1991 as amended and rules and regulations

issued by Bangladesh Bank. The principal activities of the Bank are to provide all types of commercial banking

services, within the stipulations laid down by Bank Companies Act 1991 and directives as received from Bangladesh

Bank time to time, through its branches, SME Centre and alternative delivery channels like ATM Booths, Mobile and

Internet Banking etc.

The Bank started its banking business from 24 June 1983 and has completed over 33 successful years of operations.

Page | 15

IMPLEMENTATION SCHEDULE [Rule-8(k)]

SL Use of Rights Share Proceeds Amount in Taka Tentative time

1 Term Loan 4,000,000,000.00 Within 12 (twelve) months of receiving the

Rights issue proceeds

2 Continuous Loan 1,000,000,000.00 Within 12 (twelve) months of receiving the


3 Demand Loan 638,219,070.00 Within 12 (twelve) months of receiving the


Total 5,638,219,070.00

Sd/- Sd/-

Dilip Kumar Mandal FCA M Shah Alam Sarwar


Date: 18 September 2016

QUANTITY OF SHARES HELD BY EACH DIRECTOR ON THE DATE OF RIGHTS SHARE OFFER

DOCUMENT [(ROD) (Rule-8(I)]

(As on 20 July 2016)

Sl.

Name of the Directors

Position

Number of

Percentage

Shares

(%)

1 Mr. Salman F Rahman Chairman 11,279,614 2.00

2 Mr. Monirul Islam Independent Director Nil Nil

3 Mr. Anwaruzzaman Chowdhury Independent Director Nil Nil

4 Mr. Jalal Ahmed Govt. nominated Director 184,643,542 32.75

(Shares owned

5 Mr. A. R. M. Nazmus Sakib Govt. nominated Director

by the Govt. of

6 Ms. Quamrun Naher Ahmed Govt. nominated Director Bangladesh)

7 M Shah Alam Sarwar Managing Director Nil Nil

Total 195,923,156 34.75%

Sd/- Sd/-

A. K. M. Mozharul Hoque M Shah Alam Sarwar

Company Secretary Managing Director & CEO Date: 1 August 2016

BENEFICIAL OWNERS HOLDING SHARES 5% OR ABOVE [Rule-8(l)]

As per [Rule-8(l)] of the Securities and Exchange Commission (Rights Issue) Rules, 2006; there is no beneficial owner holding shares 5% or above of the Bank except the Government of People Republic of Bangladesh who hold 32.75% shares of total Paid Up Capital.

Sd/- Sd/-

A. K. M. Mozharul Hoque M. Shah Alam Sarwar


Page | 16

COMPOSITION OF SHAREHOLDING POSITION OF THE BANK

(As on 20 July 2016)

Sl No. Category No. of Shares held Total Amount of % of Total Shares

Shares in Taka

01. Sponsors & Directors 232,482,207 2,324,822,070.00 41.23

02. Institutions 127,072,552 1,270,725,520.00 22.54

03. General Public 204,267,148 2,042,671,480.00 36.23

Total 563,821,907 5,638,219,070.00 100.00

Sd/- Sd/-



DETAILS OF DIRECTORS, MANAGING DIRECTOR AND SECRETARY [Rule-8(m)]

BOARD OF DIRECTORS

Name Position Occupation Address

Mr. Salman F Rahman Chairman Industrialist House No. 17, Road No. 02

Dhanmondi R/A, Dhaka - 1205

Mr. Monirul Islam Independent

Business Flat No. 501, House No. 62, Road No.

Director 9/A, Dhanmondi R/A, Dhaka-1205

Mr. Anwaruzzaman Independent

Business

129, Springfield Drive IIford,,Essex, 1G2

Chowdhury Director 6QP, U.K.

Additional Secretary

Mr. Jalal Ahmed Govt. Nominated

Govt. Service Ministry of Finance

Director Building No. 7 Bangladesh Secretariat,

Dhaka.

Additional Secretary

Mr. A.R.M. Nazmus Sakib Govt. Nominated

Govt. Service Ministry of Finance

Director Building No. 7, Bangladesh Secretariat

Dhaka.

Ms. Quamrun Naher Ahmed

Additional Secretary Bank and Financial Institutions Division

Govt. Nominated Govt. Service

Ministry of Finance

Director Building No. 7

Bangladesh Secretariat

Dhaka.

Page | 17

MANAGEMENT AND EXECUTIVES

Sl. Name Address Description Occupation

Present (Business) Permanent Designation Age Educational Qualification

1 M Shah Alam Sarwar IFIC Bank Ltd, Head Apt # A-4, Gardenia House # 8/B, Managing Director & 57 Years

M.B.A in International Private Service Office, Dhaka Road # 75 Gulshan, Dhaka-1212 CEO Trade & Finance

2 S.M Abdul Hamid IFIC Bank Ltd, Head Vill.-Deya, P.O-Mathureshpur P.S- DMD 61 Years

M.B.A in Finance & Private Service

Office, Dhaka Kaligonj, Dist-Satkhira Banking

3 Muhammad Mustafa Haikal IFIC Bank Ltd, Head H#35, Rd.#28(Old), 15(New) DMD & Chief Risk 56 Years M.Com in Management Private Service

Hashmi Office, Dhaka Dhanmondi R/A, Dhaka Officer Studies

4 Raihan Ul Ameen IFIC Bank Ltd, Head Apt.#103, Concord Mayfair, Road- DMD & Chief 58 Years B.Com (Hons) in Finance Private Service

Office, Dhaka 83, House-5, Gulshan-2, Dhaka Operations Officer

5 Fariduddin Al Mahmud IFIC Bank Ltd, Head 41, Gagon Babu Road, Khulna DMD & Head of 60 Years M.Com in Marketing Private Service

Office, Dhaka Branch Banking

6 Shah Md. Moinuddin IFIC Bank Ltd, Head 14/14 Tajmahal Road Block-'C', DMD & Head of 55 Years

M.Com in Accounting Private Service

Office, Dhaka Mohammadpur R/A Dhaka-1207 Business

7 Md. Nurul Hasnat IFIC Bank Ltd, Head House No.-195/2, East Brahmondi, PO-Narsingdi Govt. College, Narsingdi.

DMD & Head of Business Delivery

52 Years

M.B.A in H.R.M Private Service Office, Dhaka

8 A.K.M. Mozharul Hoque IFIC Bank Ltd, Head "Chhya Bethi", Race Course, SEVP & Company 63 Years

M.Sc in Psychology Private Service

Office, Dhaka Comilla-3500 Secretary

9 Md. Bader Kamal IFIC Bank Ltd, Head F/180 New Town, Jessore SEVP & Head of 58 Years

M.B.A in Finance Private Service Office, Dhaka ICC

10 Syed Mansur Mustafa IFIC Bank Ltd, Head Court Road, Comilla Sadar, SEVP & Chief Credit 45 Years

E.M.B.A in Finance Private Service

Office, Dhaka Comilla-3500 Officer

11 Khan Abu Roushan IFIC Bank Ltd, Head Office, Dhaka

House#596, Road#8(Old-31), SEVP & Head of 55 Years

Master Of Defense Studies Private Service

Mohammad Mostofa Kamal D.O.H.S, Mirpur, Dhaka-1216 HRMD (MDS)

12 Ashim Chowdhury IFIC Bank Ltd, Head

Office, Dhaka Flat no.4-D, Navana Vardancy, 41, New Eskaton Road, Dhaka

SEVP & Head of Operations Center

56 Years MBA Private Service

13 Syed Fazle Ahmed IFIC Bank Ltd, Head

Office, Dhaka Flat No-6/B, House no.- 10, Road no.-13, Sector-3, Uttara, Dhaka

SEVP & Head of CPTU 57 Years M. Com in Marketing Private Service

14 Md. Badrul Alam IFIC Bank Ltd, Head "Hirajheel" Central Road, Ghope, EVP & Chief Law 59 Years

L.L.B in Law Private Service

Office, Dhaka Jessore Officer

15 Iqbal Parvez Chowdhury IFIC Bank Ltd, Agrabad Branch, Ctg.

Flat-B7, "Allister", Road-01, South Khulshi, Chittagong

EVP & Branch Manager - Agrabad Br.

44 Years

MBA in Management Private Service

16 Md. Rafiqul Islam IFIC Bank Ltd. Gulshan

Branch, Dhaka

Mehman Tower, Apt. # 7/1, 33

Shantinagar, Dhaka-1217

EVP & Branch Manager –

Gulshan Br.

44 Years MBA in HRM Private Service

17 Ferdousi Begum IFIC Bank Ltd, Head 4/6, Iqbal Road, Apt. No# B.5, EVP & Head of Retail 53 Years

M.S.S in Political Science Private Service

Office, Dhaka Agnishika, Mohammadpur, Dhaka Banking

18 M. Mozibar Rahman IFIC Bank Ltd, Head Office, Dhaka

Vill-Hoshnabad P.O-Nizamuddin College, P.S-Gournadi, Barisal

SVP – Head of MD's Secretariat

53 Years

MBA in HRM Private Service

19 Dilip Kumar Mandal IFIC Bank Ltd, Head Vill: Krishna Nagar, PO: Gobindapur, PS: Nawabganj, Dhaka

SVP & Chief Financial 40 Years

FCA, M.Com in Private Service

Office, Dhaka Officer Accounting

Page | 18

PUBLIC LISTED COMPANIES UNDER COMMON MANAGEMENT [Rule-8(n)]

As per the Bangladesh Securities and Exchange Commission (Rights Issue) Rules, 2006; there is no Public Listed Company under the common Management of IFIC Bank Limited. However, the following Directors are involved with the other Listed Companies:

Name of Position with Entities where they have interest Position with other

Directors IFIC organization

Mr. Salman Chairman Bangladesh Export Import Co Ltd. Vice Chairman

F Rahman Beximco Pharmaceuticals Ltd. Vice Chairman

Beximco Synthetics Ltd. Vice Chairman

Shinepukur Ceramics Ltd. Vice Chairman

Mr. Jalal Govt. nominated Bangladesh Services Ltd. Director

Ahmed director British American Tobacco Bangladesh Co Ltd. Director

Bangladesh Submarine Cable Co Ltd. Director

CLASSIFIED INFORMATION & UNDERWRITERS [Rule-8 (o)]

Issue Manager ICB Capital Management Ltd.

Green City Edge (5th & 6th Floor), 89, Kakrail, Dhaka-1000, Bangladesh.

Auditors M. J. Abedin & Co

Chartered Accountants National Plaza (3rd Floor), 109, Bir Uttam C.R. Datta Road, Dhaka 1205.

Bankers to the Issue IFIC Bank Limited

IFIC Tower, 61, Purana Paltan, G.P.O. Box: 2229, Dhaka-1000, Bangladesh

Investment Corporation of Bangladesh (ICB) BDBL Building, 8 Rajuk Avenue, Dhaka-1000, Bangladesh

Legal Advisor Ahsanul Karim

Advocate

Saiham Sky View Tower, Suite # 11/A (11th

Floor), 45, Bijoynagar, Dhaka-1000

Tax Consultants Adil & Associates

Advocate & Tax Consultants

50, Purana Paltan Line (4th

Floor), Dhaka-1000

NAME OF THE UNDERWRITERS

IFIC Bank Limited is going to offer rights share of 563,821,907 ordinary shares of BDT 10.00 each issuing per share at par BDT 10.00 per share totaling BDT 5,638,219,070.00. As per Bangladesh Securities and Exchange Commission’s guideline, the issuer of a listed security making rights issue shall appoint one or more underwriters

licensed under 1996 to fully underwrite the

rights issue on a firm commitment basis. Underwriting commission will be @ 0.15% on the underwritten amount and there will be no additional commission for take-up of unsubscribed portion of shares if any.

Page | 19

Sl. Name Address No. of Shares Amount of the % of shares

No. Underwritten shares underwritten underwritten

1 AFC Capital Ltd. Saiham Sky View Tower(11th floor), 45 Bijoy Nagar, Dhaka-1000. 5,000,000 50,000,000.00 0.89

2 Agrani Equity & Investment Ltd. Swantex Bhaban (4th floor) 9/I, Motijheel, Dhaka-1000 10,000,000 100,000,000.00 1.77

3 Bengal Investments Limited Eastern Nibash (3rd Floor)138, Gulshan Avenue, Gulshan-2, Dhaka-1212. 20,000,000 200,000,000.00 3.55

4 Beta One Investments Limited Green Delta AIMS Tower (Level – 4), 51-52, Mohakhali C/A, Dhaka- 10,000,000 100,000,000.00 1.77 1212.

5 BLI Capital Limited Eunoos Centre (Level-18), 52-53 Dilkusha C/A, Dhaka-1000 15,000,000 150,000,000.00 2.66

6 BRAC EPL Investment Ltd. Concord Baksh Tower(8th floor), Plot No. 11/A, Road No. 48, Block- 20,000,000 200,000,000.00 3.55

CWN(A), Kemal Ataturk Avenue, Gulshan-2, Dhaka-1212.

7 CAPM Advisory Limited Tower Hamlet (9th Floor), 16 Kemal Ataturk Avenue, Banani C/A, 15,000,000 150,000,000.00 2.66 Dhaka-1213.

8 EBL Investments Limited 59 Motijheel C/A, Dhaka-1000. 10,000,000 100,000,000.00 1.77

9 EXIM Islami Investment Ltd. Printers Building (5th floor), 5 Rajuak Avenue, Motijheel C/A, Dhaka- 25,000,000 250,000,000.00 4.43 1000.

10 FAS Capital Management Ltd. Zahed Plaza(5th floor), 30 Gulshan Avenue North C/A, Dhaka-1212 10,000,000 100,000,000.00 1.77

11 NRB Equity Management Limited Suite - 602, 603, (6th floor) Al-Raji Complex, 166-167, Shaheed Syed Nazrul Islam Sarani, Purana Paltan, Bijoy Nagor, Dhaka-1000

30,000,000 300,000,000.00 5.32

12 First Security Islami Capital & Investment Ltd. Al-Amin Center (12th floor), 25/A Dilkusha C/A, Dhaka-1000. 20,000,000 200,000,000.00 3.55

13 ICB Capital Management Limited Green City Edge (5th & 6th floor), 89 Kakrail, Dhaka-1000. 131,821,907 1,318,219,070.00 23.39

14 IIDFC Capital Limited Eunoos Trade Centre ( Level 7), 52-53, Dilkusha C/A, Dhaka. 25,000,000 250,000,000.00 4.43

15 Jamuna Bank Capital Management Limited Hadi Mansion (3rd Floor), 2, Dilkusha C/A, Dhaka-1000. 25,000,000 250,000,000.00 4.43

16 Janata Capital and Investment Limited 48, Motijheel (3rd floor), Dhaka1000 2,000,000 20,000,000.00 0.35

17 Lanka Bangla Investments Limited City Center | Level - 24 | 90/1 Motijheel C/A, Dhaka - 1000 50,000,000 500,000,000.00 8.88

18 NBL Capital & Equity Management Ltd. 5 Rajuk Avenue, Printers Building,(8th Floor), Dhaka 20,000,000 200,000,000.00 3.55

19 PLFS Investments Limited Paramount Heights (13th Floor), 65/2/1 Box Culvert Road, Purana Paltan, 10,000,000 100,000,000.00 1.77

Dhaka-1000.

20 Rupali Investment Ltd. Shadharan Bima Tower (7th floor), 37/A Dilkusha C/A, Dhaka-1000 20,000,000 20,000,000.00 3.55

21 SBL Capital Management Ltd. 02, DIT Avenue (Extension), 3rd Floor, Motijheel C/A, Dhaka-1000. 10,000,000 100,000,000.00 1.77

22 Sonali Investment Ltd. Sara Tower (11th Floor), 11/A, Toyenbee Circular Road, Motijheel C.A., 5,000,000 50,000,000.00 0.89 Dhaka-1000

23 Sonar Bangla Capital Management Limited Paramount Heights (8th Floor), 65/2/1, Box Culvert Road, Purana Paltan, 5,000,000 50,000,000.00 0.89 Dhaka-1000

24 Southeast Bank Capital Services Limited Eunoos Centre (Level-9), 52-53 Dilkusha C/A, Dhaka-1000 25,000,000 250,000,000.00 4.43

25 Swadesh Investment Management Limited Suite 01, Level 11, Unique Trade Center (UTC), 8 Karwan Bazar, Dhaka. 15,000,000 150,000,000.00 2.66

26 Unicap Investments Limited Noor Tower (4th Floor) 73, Sonargaon Road, Dhaka-1205 30,000,000 300,000,000.00 5.32

Total 563,821,907 5,638,219,070.00 100.00

Page | 20

Underwriters’ information and obligation:

If and to the extent that the shares offered to the existing shareholders by the Rights Share Offer Document

authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the

Bank shall within 10 (ten) days of the closure of subscription call upon the underwriters (for full

unsubscribed amount) in writing with a copy of said writing to the Bangladesh Securities and Exchange

Commission, to subscribe for shares not subscribed by the closing date and to pay for in cash in full,

inclusive of any premium if applicable, for such unsubscribed shares within 15 (fifteen) days after being

called upon to do so. If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that

the underwriter has not fulfilled his obligation towards his commitment under this Agreement, until such

time as the Cheque/Bank Draft has been encashed and the Bank’s account has been credited. In any case,

within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days, the Bank shall send proof of

subscription and payment by the underwriters, to the Commission.

DIRECTORS’ SUBSCRIPTION IN THE RIGHTS OFFER [RULE-8(Q)]

Director’s Take-up in the Rights Offer [Rule-8(Q)] is as under:

Number of

Number of

Number of

Rights Shares

Sl.

Name of the Directors

Position

Rights Shares

Shares held

to be

offered

Renounced

1 Mr. Salman F Rahman Chairman 11,279,614 11,279,614 Nil

2 Mr. Monirul Islam Independent Director Nil N/A N/A

3 Mr. Anwaruzzaman Chowdhury Independent Director Nil N/A N/A

4 Mr. Jalal Ahmed Govt. nominated Director 184,643,542 184,643,542 Nil

(Shares owned

(Shares owned

5 Mr. A. R. M. Nazmus Sakib Govt. nominated Director

by the Govt. of by the Govt. of

6 Ms. Quamrun Naher Ahmed Govt. nominated Director Bangladesh) Bangladesh)

7 Mr. M. Shah Alam Sarwar Managing Director Nil N/A N/A

Sd/- Sd/-



BANKERS TO THE ISSUE OF RIGHTS SHARE IFIC BANK LIMITED

Sl.

No. Name of Branch Address

DHAKA DIVISION

1 Ashulia Branch “Rifat Square Plaza”, Jamgora, Ashulia, Dhaka

2 Bajitpur Branch 215, Bajitpur Bazar, P.O. Bajitpur, Dist. Kishoreganj

3 Banani Branch “Glowing Stone”, House No. 54, Road No. 11, Block-C, Banani, Dhaka

4 Bangshal Branch 29/1, Nazira Bazar Lane, North South Road, Dhaka

5 Bashundhara Branch Ka- 5/2, Ka-7/1, 7/2 Jagannathpur, Bashundhara Road, Ward No.17, Badda, Dhaka.

6

Darus Salam Road

Branch.

17, Darus Salam Road, Mirpur-1, Dhaka. 1216.

Page | 21

7 Dhanmondi Branch Royal Plaza (Ground & 1st floor), House # 8A, Road # 4, Mirpur Road, Dhanmondi,

Dhaka-1205.

8 Elephant Road Branch 73/1, Elephant Road, (1st Floor), Dhaka

9 Faridpur Branch Razzaque Plaza, Oriental Property, (1st Floor), 118, Thana Road, Faridpur

10 Garibe Newaz Avenue Plot No. 10, Garribe Newaz Avenue, Sector No. 11, Uttara, Dhaka.

11 Gazipur Chowrasta

Branch Bagdad Tanjia Tower, (1st floor) Gazipur Sadar, Gazipur.

12 Gulshan Branch Holding No.109, Gulshan Avenue, Ward No.19, Gulshan, Dhaka-1212.

13 Gulshan-Tejgaon Link

Road Br.

“NINA KABBO”, 227/A, Gulshan-Tejgaon Link Road, Ward No.37, Tejgaon,

Dhaka.

14 Islampur Branch Paradise Bhaban, 104, Islampur Road, Dhaka

15 Kawran Bazar Branch 3, Kawran Bazar, Petro Centre Building, Dhaka

16 Keranigonj Branch “Bikrampur Plaza” (1st floor), Shahid Delwar Hossain Road, East Aganagar,

Keranigonj, Dhaka

17 Lalmatia Branch House # 405E, Road No.16 (New), 27(Old), Dhanmondi R/A, Dhaka.

18 Malibagh Branch 91- B, Khilgaon, Malibagh Chowdhury Para, DIT Road, Dhaka-1219

19 Manikgonj Branch “Rudronil Plaza”, 134, Shahid Rafique Sarak, Manikgonj.

20 Mirpur Branch “Azaz Tower”, Holding No.145, Begum Rokeya Sarani, Ward No.14, Mirpur, Dhaka

21 Mohakhali Branch “Siddique Tower”, Holding No.49, A.K. Khandaker Sarak, Ward No.20, Banani,

Dhaka

22 Mohammadpur Branch "Ring Tower" (1st floor), Block-F, Plot No.16/B, Probal Housing, Ward No.43, Ring

Road, Dhaka-1207.

23 Moulvibazar Branch 6/1, Mokim Katra, Dhaka

24 Narayanganj Branch 66/1, Bangabandhu Road, Narayanganj

25 Narsingdi Branch Nayan Tara Plaza (1st floor), 137/1, C & B Road,, Narsingdi. Sadar, Narsingdi

26 Naya Paltan Branch Orchard Faruque Tower, 72, Naya Paltan, (1st Floor), Dhaka

27 Pallabi Branch Kashem Chamber, (1st & 2nd floor), Plot # 11, Main Road # 3, Section # 7, Pallabi,

Mirpur, Dhaka

28 Principal Branch IFIC Tower, 61 Purana Paltan, Dhaka – 1000.

29 Progoti Sarani Branch 2nd Level of AJ Height’s Building, Cha-72/1/D, Progoti Sarani, Uttar Badda, Dhaka-

1212.

30 Rupganj Branch “Manik Villa”, Tarabo Bazar Road, Trabo Rupganj, Narayanganj

31 Savar Bazar Branch 74, Lohapotti,Savar nama Bazar, Savar, Dhaka

32 Shantinagar Branch 24, Shantinagar, Chamelibag, Dhaka.

33 Shariatpur Branch 469, Tulasar Sadar Road, Shariatpur Sadar, Shariatpur

34 Stock Exchange Branch 16, Motijheel C/A, Dhaka

35 Tangail Branch "Laso Plaza" (1st floor), Khalpar Road, Municipal Holding No.59, Ward No.13,

Tangail

36 Tongi Branch 29, Tongi Bazar Road, Tongi Bazar, Tongi, Gazipur

37 Uttara Branch ABC Heritage (1st floor), 02 & 04, Jasimuddin Avenue, Sector – 03, Urrata, Dhaka-

1230

MYMENSINGH DIVISION

38 Jamalpur Branch Nahar Gold Plaza, (1st flor) 1024, Madical, Jamalpur Sadar, Jamalpur.

39 Mymensingh Branch 52, Choto Bazar 1st Floor, Mymensingh.

40 Sherpur Branch 18, Ameen Plaza (1st floor), Kharampur Road, Sherpur District Town, Sherpur.

CHITTAGONG DIVISION

41 Agrabad Branch 30, Agrabad C/A, Chittagong

42 Brahmanbaria Branch Ground floor, 4. Court Road, Brahmanbaria

43 CDA Avenue Branch 1005/2/1872, CDA Avenue, East Nasirabad, Panchlaish, Chittagong

44 Chawk Bazar Branch Shahzada Market, 68, College road, Chawk Bazar, Chittagong.

45 Choumuhani Branch 667/785, South Bazar, Choumuhani, Begumgonj, Noakhali

46 Comilla Branch 190/193 Rajgonj, Crossing. Chatipatty, Comilla

47 Cox's Bazar Branch 158, Main Road (1st Floor), Ali Arcade, Cox's Bazar

48 Feni Branch 99, Islampur Road (1st Floor), Feni

Page | 22

49 Khatunganj Branch 249/250, Khatunganj Road, Chittagong

50 Laldighi Branch “Jamal Complex” (1st floor), 8, Laldighirpar, (East), Ward No.32, Andorkilla ward,

Kotwali, Chittagong

51 Rangamati Branch Rangamati Branch (Urban), (1st & 2nd floor), 122, Bazar Fund Road, Kathaltoli,

Rangamati

52 Shah Amanat Market 624/A, Shah Amanat Municipal Super Market (Ground Floor), Jubilee Road,,

Reazuddin Bazar, Chittagong

53 Sheikh Mujib Road

Branch Azmal Arcade (1st floor), 1806, Sk. Mujib Road, Pathantuli, Chittagong.

RAJSHAHI DIVISION

54 Bogra Branch Modhu metro Tower (1st floor) Kobi Nazrul Islam Road, Satmatha Holding

No.5664. Satmatha Bogra

55 Chapai Nawabganj

Branch 21, Daudpur Madrasha Road(1st Floor), Puratan Bazar, Chapainawabganj

56 Joypurhat Branch (1st floor), Joypurhat Sadar Road, Municipal Holding No.138/0, 138/1 & 138/2,

Ward No.08, Joypurhat

57 Naogaon Branch 263, Main Road, Thakur Mansion (1st floor), Naogaon

58 Pabna Branch Chamber Building,1st floor), Benai Patty, (Sona Patty), Pabna

59 Rajshahi Branch 3, Shaheb Bazar, Ghoramara, Rajshahi

RANGPUR DIVISION

60 Dinajpur Branch Maldah patty,Sadar, Dinajpur.

61 Rangpur Branch Sarker Super Market, (1st Floor), 41/42, Dewan Bari Road, Betpatty, Rangpur

KHULNA DIVISION

62 Bagerhat Branch Sadonar More, 56, Kazi Nazrul Islam Road, Bagerhat.

63 Jessore Branch 59, N.S.C. Road, (Garikhana Road), Jessore

64 Khulna Branch Fatema Building, 81, Lower Jessore Road, Khulna

65 Kushita Branch 2, Siraj-Ud-Dowla Road, Abdul Hamid Market, N.S. Road, Kushtia.

66 Noapara Branch Dhaka – Khulna Highway, 97 Noapara Bazar, Jessore.

67 Satkhira Branch Mojahar Ali Complex, (1st Floor) Shahid Kajal Sarani, KaliganjSarak, Satkhira.

BARISAL DIVISION

68 Barisal Branch 95, Sadar Road, Barisal

69 Bhola Branch (1st floor) “M.R. Plaza”, Holding No.0386-02, 0400-08, Sadar Road, Ward No.6,

Bhola

SYLHET DIVISION

70 Ambarkhana Branch Point View Shopping Center (1st floor), Amberkhana, Sylhet.

71 Habiganj Branch “Sankar City’’ Holding No- 3430, R.K.Miossion, Road, Habiganj Sadar, Habiganj

72 Moulvi Bazar (Dist.)

Branch 69/1, Central Road, Paschim Bazar, P.O. & Dist. Moulvi Bazar

73 Sreemongal Branch Razzaque Cosmopolitan Super Market (1st Floor), Hobigonj Road, Shreemongal,

Moulvi Bazar

74 Sylhet Branch 963, Laldighirpar, Sylhet

75 Uposhohor Branch Nosir Mansion (1st floor) Mendibagh C/A., Uposhohor, Dist. Sylhet.

INVESTMENT CORPORATION OF BANGLADESH (ICB)

1 Head Office NSC Tower , 62/3 Purana Paltan, Dhaka

2 Chittagong Branch 104, Agrabad C/A, Chittagong

3 Rajshahi Branch Dr. Gaffar Plaza (2nd Floor), Main Road, Shaheb Bazar, Rajshahi

4 Khulna Branch Shilpa Bank Bhaban, 25-26, KDA C/A, Khulna

5 Barisal Branch 87/88, Hemayet Uddin Road, Barisal

6 Sylhet Branch Ananda Tower and Shopping Complex, Jail Road, Sylhet

7 Bogra Branch Afsar Ali Complex, Raza Bazar, Borogola, Bogra

8 Local Office Kashfia Plaza, 35/C Nayapaltan, Dhaka

Page | 23

TERMS AND CONDITIONS OF THE RIGHTS ISSUE

BASIS OF THE OFFER: The Bank records its share register of members on 12 April 2017 for determining the shareholders who are eligible

to receive this offer of shares on rights basis. The ordinary shares are now being offered on a rights basis to the shareholders holding shares on the record date in the ratio of 1R:1 i.e. one right share for one existing share held.

ENTITLEMENT: As a shareholder of the Bank on the record date on 12 April 2017 the shareholders are entitled to this Rights Offer.

Only the holder(s) of a minimum of one fully paid ordinary share is entitled to receive the Rights Offer.

ACCEPTANCE OF THE OFFER: A shareholder may accept and apply for the shares hereby offered, wholly or in part by filling in Application - Form A and submitting the same along with the application money to the Bankers to the Issue on or before the Closing Date of the Offer i.e. 29 June 2017.

RENUNCIATION: A shareholder may renounce all or part of the shares he/she is entitled to in favor of any other person(s) other than an infant or person of unsound mind. He/she can renounce his/her rights/entitlement of shares by signing Renunciation Form-B. Renouncee(s) shall fill in Form-C appropriately.

GENERAL: All applications should be made on the printed form provided by the Bank in this Rights Share Offer Documents only

and should be completed in all respects. Applications, which are not completed in all respects or are made otherwise than as herein provided or are not accompanied by the proper application amount of deposit, are liable to be rejected and the application money received in respect thereof shall be refunded.

All communications in connection with the application for the Rights Share should be addressed to the Bank quoting the registered folio number/BO ID number in the form.

CONDITION OF SUBSCRIPTION:

Rights Offer of 563,821,907 ordinary shares of BDT 10.00 each issuing at par, totaling BDT 5,638,219,070.00 offered on the basis of 1(R):1 i.e. 1 (one) rights share for 1 (one) existing shares held by the Shareholder(s) whose name(s) appeared in the Bank’s Share Register at the record date as on 12 April 2017.

PAYMENT OF SHARE PRICE: Payments for the full value of Shares applied for shall be made with designated branches of Bankers to the issue by Cash/Pay Order/Demand Draft payable to "IFIC Bank Limited" and crossed. The Pay Order/Demand Draft for

payment of share price must be drawn on a bank in the same town to which the application form has been submitted.

Opens on: 31 May 2017 SUBSCRIPTION Closes on: 29 June 2017

Within Banking Hours (Both Days Inclusive)

Any changes or extension regarding subscription period will be notified through national dailies.

Page | 24

LOCK-IN ON RIGHTS SHARE:

The rights share of Directors and other shareholders holding 5% or more shares shall be subject to lock-in for a period of three years from the date of closure of the rights share subscription. In the event of renunciation of rights shares by aforesaid persons, the renounced shares shall also be subject to lock-in for the same period.

Sl. Name of the Directors Position Number of

Shares held

Lock in portion

of Rights Share

Date of

Subscription

Close

Expiry Date of

Lock-in

1 Mr. Salman F Rahman Chairman 11,279,614 11,279,614 29 June 2017

3 Years from the

date of

subscription close

2 Mr. Monirul Islam Independent

Director Nil N/A N/A N/A

3 Mr. Anwaruzzaman

Chowdhury

Independent


4 Mr. Jalal Ahmed Govt. nominated

Director 184,643,542

(Shares owned

by the Govt. of

Bangladesh)

184,643,542

29 June 2017 3 Years from the

date of

subscription close

5 Mr. A. R. M. Nazmus Sakib Govt. nominated

Director 29 June 2017

6 Ms. Quamrun Naher

Ahmed

Govt. nominated

Director 29 June 2017

7 Mr. M. Shah Alam Sarwar Managing


Total 195,923,156 195,923,156

OTHERS: The application not properly filled in shall be treated as cancelled and deposited money will be refunded. For any reason, no profit/compensation will be paid on the refunded amount.

The offer will be deemed to have been declined if completed Application Form-A with necessary payments have not been received by 29 June 2017 (Within banking hours) or by such later date as may be notified through national dailies to that effect. MATERIAL CONTRACTS: Banker to the Issue IFIC Bank Limited and Investment Corporation of Bangladesh (ICB) are the bankers to the issue who will collect the subscription money of the rights offer. The rights issue subscription money collected from the shareholders by the

bankers to the issue will be remitted to the Bank’s SND Account no. 1001-000705-041 with IFIC Bank Limited,

Principal Branch, Dhaka. No commission will be paid to IFIC Bank Limited. However, commission @ of 0.10 % of the amount collected will be paid to ICB for the services to be rendered by them.

Underwriters Full amount of rights offer of IFIC Bank Limited have been underwritten by 26 (twenty six) underwriters as shown

in the classified information part of ROD. Each underwriter will be paid underwriting commission @ 0.15% of the nominal value of shares underwritten by them out of the rights issue. Simultaneously, with the calling upon an

underwriter to subscribe and pay for any number of shares, the Bank will pay no additional commission to that

underwriter on the nominal value of shares required to be subscribed by them.

Manger to the Issue ICB Capital Management Limited is appointed as Manager to the Issue of the Rights Issue of the Bank. Accordingly,

an agreement has been executed between the Issue Manager and the Bank. The Bank will pay issue management fee

BDT 2.50 million to the Manager to the Issue. Material Contracts of the vendors’ IFIC Bank Limited has not entered into any Vendors’ Agreement.

Acquisition of property, plant and equipment The Bank did not acquire any property or enter into agreement for acquisition of any property after the balance sheet date 30 June 2016.

Page | 25

FORM-A [rule 5 and rule 8(t)]

Declaration (due diligence certificate) about responsibility of the Issue Manager in respect of the rights share

offer document of IFIC Bank Limited.

This rights share offer document has been reviewed by us and we confirm after due examination that the rights share

offer document constitutes full and fair disclosures about the rights issue and issuer, and complies with the

requirements of the Bangladesh Securities and Exchange Commission (Rights Issue) Rules, 2006; and that the issue

price is justified under the provisions of the Bangladesh Securities and Exchange Commission (Rights Issue) Rules,

2006.

For

ICB Capital Management Limited

Sd/-

(Nasrin Sultana)

Place: Dhaka Chief Executive Officer

Date: 27 July 2016

Page | 26

FORM-B

[rule 6 and rule 8(t)]

Declaration (due diligence certificate) about responsibility of the Underwriter(s) in respect of the rights share

offer document of IFIC Bank Limited.

This rights share offer document has been reviewed by us and we confirm after due examination that the issue price

is justified under the provisions of the Bangladesh Securities and Exchange Commission (Rights Issue) Rules, 2006,

and also that we shall subscribe for the under-subscribed rights shares within fifteen days of calling thereof by the

issuer. The issuer shall call upon us for such subscription within ten days of closure of the subscription lists for the

rights issue. Sd/- Sd/-

(Mahbub H. Mazumdar FCMA) (Mohammad Saleh Ahmed)

Chief Executive Chief Executive Officer

AFC Capital Ltd. IIDFC Capital Limited

Sd/- Sd/- (Md. Golam Kabir) (Md. Al Tamas)

Chief Executive Officer Chief Executive Officer

Agrani Equity & Investment Ltd. Jamuna Bank Capital Management Limited

Sd/- Sd/- (M. M. Mostafa Bilal) (Dina Ahsan)

CEO & Managing Director Chief Executive Officer

Bengal Investments Limited Janata Capital and Investment Limited

Sd/- Sd/- (Mohammed Atiquzzaman) (Khandakar Kayes Hasan, CFA)

Managing Director Chief Executive Officer

Beta One Investments Limited Lanka Bangla Investments Limited

Sd/- Sd/- (Md. Lutfur Rahman) (Kamrun Naher)

Managing Director Chief Executive Officer (Current Charge)

BLI Capital Limited NBL Capital & Equity Management Ltd.

Sd/- Sd/- Deedarul Huq Khan (Md. Abdul Muktadir, CFA)

Chief Executive Officer Chief Executive Officer

BRAC EPL Investment Ltd. PLFS Investments Limited

Sd/- Sd/- (Mufakhkharul Islam) (Md. Mamunur Rashid)

Managing Director & CEO Chief Executive Officer

CAPM Advisory Limited Rupali Investment Ltd.

Sd/- Sd/- (Moinul Hossain Asif) (Abu Nayem Md. Ibrahim)

Managing Director Chief Executive Officer

EBL Investments Limited SBL Capital Management Ltd.

Sd/- Sd/-

(Abu Hena Md. Mohsin) (Surajit Kumar Saha)

Chief Executive Officer Chief Executive Officer (Current Charge)

EXIM Islami Investment Ltd. Sonali Investment Ltd.

Sd/- Sd/- (Md. Shahidul Alam) (Emam Hossain)

Chief Executive Officer Managing Director/ CEO (C. C)

FAS Capital Management Ltd. Sonar Bangla Capital Management Limited

Page | 27

Sd/- Sd/-

(Md. Maniruzzaman Chowdhury) (Muhammad Shahjahan)

Managing Director/CEO (In charge) Managing Director (C. C)

NRB Equity Management Limited Southeast Bank Capital Services Limited

Sd/- Sd/-

(M. Anwar Husain) (Mamun Ahmed)

Chief Executive Officer Managing Director

First Security Islami Capital & Investment Ltd. Swadesh Investment Management Limited.

Sd/- Sd/- (Nasrin Sultana) (Tauhidul Ashraf FCS)

Chief Executive Officer Managing Director (Current Charge)

ICB Capital Management Limited Unicap Investments Limited

Page | 28

FORM – C [(Rule 8(h) and 8(t)] of Bangladesh Securities and Exchange Commission (Rights Issue) Rules, 2006

AUDITORS’ REPORT TO THE SHAREHOLDERS OF IFIC BANK LIMITED

We have audited the accompanying financial statements for the period from 1 January 2016 to 30 June 2016 of

International Finance Investment and Commerce Bank Limited (IFIC) in accordance with International Standards on Auditing as applicable in Bangladesh; and we state that we have obtained all the information and explanations which we have required, and after due verification thereof, we report that, in our opinion:

(a) These financial statements have been drawn up in accordance with the requirements of the Securities and

Exchange Rules, 1987, as amended, the Companies Act, 1994 and other relevant laws where applicable; and the International Financial Reporting Standards (IFRSs) as applicable in Bangladesh;

(b) These financial statements which are in agreement with the Books of Accounts of the Company give a true

and fair view of the state of its affairs as at 30 June 2016 and of the result of its operations and cash flows

for the period then ended;

(c) Proper Books of Account have been kept by the Company as required by the relevant laws; and

(d) The expenditure incurred was for the purposes of the Company’s business.

We also certify that the above company has declared the following dividend for each of the following five years immediately preceding the issue of rights share offer document under the Securities and Exchange Commission (Rights Issue) Rules, 2006, and that the company has duly paid off the following amounts of the declared dividend

mentioned against respective year-

Financial Year Date of Dividend Declared Dividend

Declaration Rate (%) Total Amount in Total Paid (BDT)

Taka

2015 14 July 2016 Stock-12% 604,094,900 N/A

2014 17 June 2015 Stock-15% 656,624,890 N/A

2013 1 June 2014 Stock-15% 570,978,160 N/A

2012 12 May 2013 Stock-10% 346,047,370 N/A

2011 11 July 2012 Stock-25% 692,094,750 N/A

Cash-5% 138,418,950 138,418,950

Sd/-

27 July 2016 M. J. ABEDIN & CO

Dhaka Chartered Accountants

Page | 29

FORM-D

[rule 8(t)]

Due diligence certificate by the directors about their personal responsibility in respect of the rights share offer

document of Investment Bank of Bangladesh (ICB).

This rights share offer document has been prepared, seen, reviewed and approved by us and we collectively and

individually accept full responsibility for the accuracy of the information given in the rights share offer document,

relevant documents and financial statements submitted to the Commission and others concerned under the Securities

and Exchange Commission (Rights Issue) Rules, 2006.

We confirm, after making all reasonable enquiries, that all conditions concerning this rights issue and rights share

offer document have been met. We further confirm that we have not concealed any information or statement which

might have any bearing on the information already made. In case of any default or failure on our part, civil, criminal

or administrative action may be taken against us.

Sd/- Sd/- Sd/-

(Salman F Rahman) (Monirul Islam) (Anwaruzzaman Chowdhury)

Chairman Independent Director Independent Director

Sd/- Sd/- Sd/-

(Jalal Ahmed) (A.R.M Nazmus Sakib) (Quamrun Naher Ahmed)

Govt. Nominated Director Govt. Nominated Director Govt. Nominated Director

Sd/- (M Shah Alam Sarwar) Managing Director

Place: Dhaka. Dated: 27 July 2016

Page | 30

AUDITORS' REPORT

OF IFIC BANK LIMITED

Under section 135(1) and paragraph 24 (1)(3) and 25 of Part-II of Third Schedule of the Companies Act 1994

AND Under Rules 8 (i) of Securities and Exchange Commission (Right Issue) Rules, 2006

We have audited the Financial Statements of IFIC Bank Limited for the half year ended 30 June 2016, for the year ended 31 December 2015 and 31 December 2011 and those for the years ended 31 December 2014, 31 December 2013 and 31 December 2012 were audited by Howladar Yunus & Co., Chartered Accountants. The presentation of these financial statements is the responsibility of the company's management. Our responsibility is to review the relevant audited financial statements and confirm that the related information have been correctly extracted from those audited financial statements. We

have reviewed the relevant audited financial statements and confirm that the related information have been correctly extracted from those audited financial statements. a. The IFIC Bank Ltd. and its subsidiaries were incorporated on :

(a) IFIC Bank Ltd. - On 08 October 1976 as a finance company later converted as full pledged commercial bank on 13 June 1983; (b) IFIC Securities Ltd. - 02 November 2010 and (c) IFIC Money Transfer (UK) Ltd. - 16 September 2010

b. Dividend declared:

31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012 31 Dec 2011

Cash dividend- % - - - - 5%

Stock dividend (Bonus share)- % 12% 15% 15% 10% 25%

c. No proceeds or part of proceeds of the issue of shares shall be applied directly or indirectly by the company in the purchase of any other business; d. Enclosures :

(i) The Statement of operating results of the Bank for the half year ended 30 June 2016 and for immediately preceding five years. (Annexure - A)

(ii) The Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years. (Annexure - B)

(iii) The Statement of Cash Flows of the Bank for the half year ended 30 June 2016 and for immediately preceding five years. (Annexure - C)

(iv) The consolidated Statement of operating results of the Bank for the half year ended 30 June 2016 and for immediately preceding five years. (Annexure - D)

(v) The consolidated Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years. (Annexure - E)

(vi) The consolidated Statement of Cash Flows of the Bank for the half year ended 30 June 2016 and for immediately preceding five years. (Annexure - F)

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27 July 2016 M. J. Abedin & Co.


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The Statement of operating results of the Bank for the half year ended 30 June 2016 and for immediately preceding five years Annexure-A

IFIC Bank Limited

Profit and Loss Account

Amount in BDT

Particulars 30 June 2016 31 Dec 2015 31 Dec 2014 (*) 31 Dec 2013 (*) 31 Dec 2012 (*) 31 Dec 2011 (*)

Interest income 6,183,111,784 12,652,962,100 11,858,390,649 11,111,313,344 10,442,619,724 6,696,082,116

Interest paid on deposits, borrowings, etc. 4,126,226,558 8,906,750,094 8,466,644,760 8,499,298,315 7,636,960,088 4,654,632,244

Net Interest income 2,056,885,226 3,746,212,006 3,391,745,889 2,612,015,029 2,805,659,637 2,041,449,872 Investment income 1,087,500,243 2,375,204,608 2,377,463,292 2,168,408,245 1,813,933,609 1,777,944,244 Commission, exchange and brokerage 735,630,242 1,414,233,170 1,328,028,172 1,235,487,075 1,150,676,093 1,374,929,738

Other operating income 304,338,628 501,372,650 498,261,794 507,884,495 408,233,685 394,635,037

2,127,469,113 4,290,810,428 4,203,753,258 3,911,779,815 3,372,843,386 3,547,509,019 Total operating income 4,184,354,339 8,037,022,434 7,595,499,147 6,523,794,844 6,178,503,023 5,588,958,890

Salaries and allowances 1,053,469,934 2,206,053,060 2,447,559,376 1,887,630,433 1,769,162,100 1,578,943,469 Rent, taxes, insurance, electricity, etc. 363,026,513 667,026,255 622,353,160 581,678,242 483,346,545 382,657,164 Legal expenses 2,411,500 8,137,039 6,430,972 5,042,307 3,734,352 3,793,766 Postage, stamp, telecommunication, etc. 59,244,725 112,775,184 110,423,384 90,061,952 72,441,274 57,155,524 Stationery, printing, advertisement, etc. 82,707,382 173,200,697 174,941,019 100,583,432 102,027,782 78,189,160 Managing Director's salary 7,560,000 13,852,500 13,660,000 13,660,000 7,952,581 7,560,000 Directors' fees 544,000 1,018,000 1,175,000 900,000 1,285,000 1,425,000 Auditors' fees 500,000 1,100,000 1,275,000 700,000 700,000 500,000 Charges on loan loss - 69,825,108 - 35,777,187 - 309,582,157 Depreciation and repair of bank's assets 196,762,162 437,966,130 397,901,121 300,657,046 269,127,711 220,905,704

Other expenses 366,708,174 700,362,744 646,956,127 559,232,642 358,342,873 229,771,372

Total operating expenses 2,132,934,390 4,391,316,717 4,422,675,159 3,575,923,240 3,068,120,219 2,870,483,316 Profit/(Loss) before provision 2,051,419,949 3,645,705,717 3,172,823,988 2,947,871,604 3,110,382,803 2,718,475,574 Provision for loans, investments and other assets

Specific provision 502,681,909 1,734,560,613 405,683,893 (145,290,413) 1,611,799,882 394,500,000 General provision 54,020,684 205,000,000 260,000,000 49,392,000 (33,000,000) 180,500,000 Provision for off-Shore Banking unit (3,963,732) 1,000,000 4,000,000 9,600,000 (6,500,000)

Provision for off-balance sheet exposure 61,499,892 - 50,000,000 63,220,000 1,500,000 30,000,000 Provision for diminution in value of investments 156,852,496 64,000,000 (250,000,000) 235,566,751 193,710,375

Other provisions 11,403,255 26,181,570 26,000,000 27,672,054 (47,210,375) 252,000,000

Total Provision 782,494,504 2,030,742,183 495,683,893 240,160,392 1,720,299,882 857,000,000 Profit/(Loss) before taxes 1,268,925,446 1,614,963,534 2,677,140,095 2,707,711,212 1,390,082,922 1,861,475,574 Provision for taxation

Current tax 850,000,000 950,000,000 1,290,000,000 1,090,000,000 963,216,485 1,073,322,931 Deferred tax expense/(income) (240,368,158) (222,017,492) (157,592,956) 272,221,188 (678,279,860) 40,177,069

609,631,842 727,982,508 1,132,407,044 1,362,221,188 284,936,625 1,113,500,000 Net profit after taxation 659,293,604 886,981,027 1,544,733,051 1,345,490,024 1,105,146,297 747,975,574 Retained earnings brought forward from previous year/period 2,075,811,205 2,168,447,775 1,730,120,903 1,272,220,491 1,275,604,478 1,488,477,019

2,735,104,809 3,055,428,801 3,274,853,954 2,617,710,515 2,380,750,775 2,236,452,593 Appropriations

Statutory reserve 253,785,089 322,992,707 535,428,019 541,542,242 278,016,584 372,295,115 General reserve - - - - Dividend - 656,624,890 570,978,160 346,047,370 830,513,700 588,553,000

253,785,089 979,617,597 1,106,406,179 887,589,612 1,108,530,284 960,848,115 Retained surplus 2,481,319,720 2,075,811,204 2,168,447,775 1,730,120,903 1,272,220,491 1,275,604,478 Earnings Per Share (EPS) 1.31 1.76 3.07 3.07 2.90 2.16

(*) Previous years'/periods' figure have been rearranged/restated to conform to current (most recent) years'/periods' presentation.

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Annexure-B The Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years

IFIC Bank Limited Balance Sheet

Amount in BDT

Particulars 30 June 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013 (*) 31 Dec 2012 (*) 31 Dec 2011 (*)

PROPERTY AND ASSETS

Cash 13,719,881,805 11,861,355,635 10,398,813,316 9,686,767,548 9,582,853,464 6,635,581,452

Cash in hand (including foreign currency) 1,640,659,380 1,626,141,729 1,829,379,694 2,019,892,903 1,793,359,302 1,182,950,554 Balance with Bangladesh Bank and its agent bank(s) (including foreign

currency) 12,079,222,425 10,235,213,906 8,569,433,622 7,666,874,644 7,789,494,162 5,452,630,899

Balance with other banks and financial institutions 10,680,738,738 5,710,545,217 12,042,832,451 10,028,347,117 5,151,800,976 3,009,489,591

In Bangladesh 8,351,492,804 3,827,088,363 11,214,966,413 8,755,055,634 3,497,911,208 1,827,211,813 Outside Bangladesh 2,329,245,934 1,883,456,854 827,866,037 1,273,291,483 1,653,889,768 1,182,277,777

Money at call and on short notice 600,000,000 - 1,450,000,000 - 950,000,000 100,000,000 Investments 24,648,486,203 28,497,856,878 22,845,255,886 21,170,763,155 15,670,685,611 12,198,870,276

Government securities 19,902,907,126 23,596,892,752 17,217,294,297 15,893,691,348 11,311,623,934 8,101,539,970 Other investments 4,745,579,077 4,900,964,126 5,627,961,589 5,277,071,808 4,359,061,677 4,097,330,306

Loans and advances 129,356,565,436 123,268,667,873 102,282,149,309 84,110,385,028 77,159,761,910 64,641,172,520

Loans, cash credit, overdrafts etc. 120,396,102,483 114,236,126,152 94,532,881,160 77,989,360,530 70,259,542,647 57,558,174,385 Bills purchased and discounted 8,960,462,953 9,032,541,721 7,749,268,149 6,121,024,498 6,900,219,263 7,082,998,135

Fixed assets including premises, furniture and fixtures 3,566,700,203 3,230,366,926 2,929,319,758 2,382,855,554 2,342,321,484 2,203,634,465

Other assets 6,407,752,502 5,391,684,061 4,016,791,501 4,310,035,366 3,871,326,334 2,921,148,641

Non-banking assets 373,474,800 373,474,800 373,474,800 373,474,800 -

Total assets 189,353,599,687 178,333,951,390 156,338,637,021 132,062,628,567 114,728,749,779 91,709,896,943

LIABILITIES AND CAPITAL Liabilities

Borrowing from other banks, financial Institutions and agents 5,046,243,835 7,200,813,714 5,621,445,116 3,492,857,352 874,456,831 1,418,845,663

Subordinated debt 3,500,000,000 - - - - -

Deposits and other accounts 153,584,566,933 146,819,705,532 129,745,805,362 110,463,796,836 92,432,755,891 73,105,732,013

Current deposit and other accounts 18,741,569,699 17,411,524,226 15,464,779,314 13,356,063,703 11,540,229,281 10,254,577,923 Bills payable 2,350,923,777 1,473,570,630 1,874,975,364 1,573,829,454 1,492,411,159 1,306,622,259

Savings bank deposits 26,205,220,198 24,496,108,248 18,366,462,687 13,890,792,353 11,468,553,820 10,031,541,483

Fixed deposits 106,286,853,259 103,438,502,428 94,039,587,998 81,643,111,325 67,931,561,631 51,512,990,348

Other liabilities 14,948,034,413 12,659,218,849 10,343,270,674 9,008,123,583 13,668,135,225 10,414,405,476

Total liabilities 177,078,845,181 166,679,738,095 145,710,521,153 122,964,777,770 106,975,347,946 84,938,983,152

Capital/Shareholders' equity

Paid up capital 5,034,124,170 5,034,124,170 4,377,499,280 3,806,521,120 3,460,473,750 2,768,379,000 Statutory reserve 4,486,284,969 4,232,499,880 3,909,507,173 3,374,079,154 2,832,536,912 2,554,520,330

General reserve 155,071,397 155,071,397 55,771,397 55,771,397 55,771,397 55,771,397

Revaluation reserve against securities 2,639,546 41,391,939 1,575,539 16,043,518 17,084,579 1,323,882

Revaluation reserve against fixed assets 115,314,704 115,314,704 115,314,704 115,314,704 115,314,704 115,314,704

Surplus in profit and loss account 2,481,319,720 2,075,811,205 2,168,447,775 1,730,120,903 1,272,220,491 1,275,604,478

Total shareholders' equity 12,274,754,506 11,654,213,295 10,628,115,868 9,097,850,797 7,753,401,832 6,770,913,792

Total liabilities and shareholders' equity 189,353,599,687 178,333,951,390 156,338,637,021 132,062,628,567 114,728,749,779 91,709,896,943

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Annexure-B

The Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years

IFIC Bank Limited Balance Sheet

Amount in BDT

Particulars 30 June 2016 31 Dec 2015 31 Dec 2014 31 Dec 2013 (*) 31 Dec 2012 (*) 31 Dec 2011 (*)

OFF BALANCE SHEET ITEMS Contingent liabilities 54,021,989,160 47,779,027,775 47,824,432,743 42,304,360,063 36,502,077,421 36,232,714,657

Acceptances and endorsements 17,865,901,197 14,210,761,791 17,819,035,175 13,876,907,522 11,672,883,029 12,949,639,891

Letters of guarantee 9,554,723,447 9,706,631,662 6,644,832,531 6,340,226,700 5,717,606,179 4,112,823,270

Irrevocable letters of credit 15,393,596,728 14,800,324,793 14,473,667,235 14,442,618,436 12,272,437,515 11,606,768,727

Bills for collection 11,207,767,788 9,061,309,529 8,886,897,802 7,644,607,405 6,839,150,698 7,563,482,770

Other contingent liabilities - - -

Other commitments - - - - - -

Documentary credit and short term trade -related transactions - - - - - -

Forward assets purchased and forward deposit placed - - - - - -

Undrawn note issuance and revolving underwriting facilities - - - - - -

Undrawn formal standby facilities, credit lines and other commitments - - - - - -

Total off-Balance Sheet exposures including contingent liabilities 54,021,989,160 47,779,027,775 47,824,432,743 42,304,360,063 36,502,077,421 36,232,714,657

(*) Previous years'/periods' figure have been rearranged/restated to conform to current (most recent) years'/periods' present ation.

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Annexure-C The Statement of Cash Flows of the Bank for the half year ended 30 June 2016 and for immediately preceding five years

IFIC Bank Limited Cash Flow Statement

Amount in BDT


A. Cash flows from operating activities Interest received 7,061,850,933 14,699,453,987 13,752,091,010 12,867,164,078 10,442,619,723 6,696,082,116

Interest payments (4,151,107,506) (8,939,654,706) (8,673,371,133) (8,450,326,191) (7,636,960,088) (4,654,632,244)

Dividend received 39,908,812 160,873,844 105,718,382 82,493,402 53,213,728 121,086,707

Fees and commission received 748,032,818 1,414,233,170 1,328,028,172 1,235,487,075 1,150,684,893 1,349,332,779

Recoveries of loans and advances previously written-off 97,612,716 91,978,387 194,316,107 648,876,150 175,200,118 70,309,771 Cash payments to employees (1,061,029,934) (2,269,905,560) (2,481,219,376) (1,871,290,433) (1,619,388,206) (1,436,503,469)

Cash payments to suppliers (170,630,573) (254,380,826) (237,324,678) (155,073,176) - -

Income taxes paid (686,656,881) (1,039,855,190) (1,194,602,128) (1,027,512,916) (808,310,404) (642,714,088)

Receipts from other operating activities 353,966,876 525,930,547 556,728,399 560,885,347 2,168,944,765 2,006,779,762

Payments for other operating activities (764,373,549) (1,424,208,735) (1,321,620,787) (1,326,887,180) (1,088,471,967) (763,775,718)

Operating cash flows before changing in operating assets and liabilities 1,467,573,712 2,964,464,919 2,028,743,968 2,563,816,156 2,837,532,562 2,745,965,616

Increase/(decrease) in operating assets and liabilities

Statutory deposits - - - - -

Loans and advances to other banks - - - - -

Loans and advances to customers (5,451,088,026) (20,441,858,272) (17,683,291,943) (8,215,063,642) (13,518,589,390) (16,974,171,298)

Other assets 30,180,633 (1,176,269,186) 269,122,656 (433,866,963) 310,761,931 1,383,049,501

Deposits from other banks (839,474,000) 306,602,000 (225,339,000) (279,194,397) 1,522,868 497,139,000

Deposits from customers 7,668,715,172 16,805,962,889 19,722,419,479 15,414,260,139 16,796,152,314 17,527,788,239

Trading liabilities - - - - - 249,689,200

Other liabilities (142,587,606) (181,510,000) 338,475,556 (48,596,393) 308,493,085 (1,245,994,721)

1,265,746,173 (4,687,072,570) 2,421,386,748 6,437,538,743 3,898,340,808 1,437,499,921

Net cash flows from/(used in) operating activities 2,733,319,885 (1,722,607,651) 4,450,130,717 9,001,354,900 6,735,873,370 4,183,465,537

B. Cash flows from investing activities

Net proceeds/(payments) from sale/(purchase) of Government securities 3,655,233,232 (6,154,867,151) (1,255,048,849) (4,216,501,213) 18,000,000 18,000,000

Net proceeds/(payments) from sale/(purchase) of securities 155,385,049 726,997,463 (285,614,169) (1,130,775,535) (261,731,372) (2,158,667,620)

Purchase of property, plant & equipment (448,985,139) (738,592,061) (833,303,359) (220,369,051) (310,872,232) (178,081,336) Proceeds from sale of property, plant & equipment 1,151,968 2,817,834 3,253,511 4,912,148 1,437,731 11,974,410

Net cash used in investing activities 3,362,785,110 (6,163,643,914) (2,370,712,866) (5,562,733,651) (553,165,872) (2,306,774,546)

C. Cash flows from financing activities

Borrowing from other banks, financial institution and agents (2,154,569,879) 1,579,368,597 2,128,587,765 640,162,802 (245,558,700) 245,558,700

Receipts from issue of sub-ordinated bond 3,500,000,000 - -

Dividend paid (cash) - - -

Payment against lease obligation (3,054,249) (6,642,120) (7,263,378) (5,140,413)

Net cash flow from financing activities 1,342,375,873 1,572,726,477 2,121,324,387 635,022,389 (245,558,700) 245,558,700

D. Net increase/(decrease) in cash (A+B+C) 7,438,480,868 (6,313,525,088) 4,200,742,237 4,073,643,638 5,937,148,797 2,122,249,691 E. Effects of exchange rate changes on cash and cash equivalents (12,402,576) (4,316,627) (24,714,234) (42,255,513) - -

F. Opening balance of cash and cash equivalents 17,579,655,952 23,897,497,667 19,721,469,664 15,690,081,540 9,752,932,743 7,630,683,052 G. Closing balance of cash and cash equivalents (D+E+F) 25,005,734,243 17,579,655,952 23,897,497,667 19,721,469,664 15,690,081,540 9,752,932,743


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The Consolidated Statement of operating results of the Bank for the half year ended 30 June 2016 and for immediately preceding five years Annexure-D

IFIC Bank Limited

Consolidated Profit and Loss Account

Amount in BDT

Particulars 30 June 2016 31 Dec 2015 31 Dec 2014 (*) 31 Dec 2013 (*) 31 Dec 2012 (*) 31 Dec 2011 (*) Interest income 6,235,093,122 12,720,241,526 11,924,197,296 11,157,042,069 10,520,385,972 6,798,012,560

Interest paid on deposits, borrowings, etc. 4,146,262,177 8,945,731,444 8,519,021,026 8,555,417,964 7,658,802,706 4,654,632,244

Net Interest income 2,088,830,945 3,774,510,082 3,405,176,270 2,601,624,104 2,861,583,266 2,143,380,316

Investment income 1,094,778,901 2,281,973,080 2,319,866,727 2,190,773,922 1,813,933,609 1,777,944,244 Commission, exchange and brokerage 775,733,422 1,519,705,704 1,423,651,023 1,321,242,455 1,254,026,405 1,473,841,108

Other operating income 304,403,226 503,793,886 499,158,565 510,329,508 429,800,154 400,771,841

2,174,915,549 4,305,472,670 4,242,676,314 4,022,345,886 3,497,760,167 3,652,557,193 Total operating income 4,263,746,494 8,079,982,752 7,647,852,584 6,623,969,990 6,359,343,433 5,795,937,509

Salaries and allowances 1,065,375,352 2,231,581,713 2,475,625,867 1,910,600,460 1,788,996,149 1,591,011,638

Rent, taxes, insurance, electricity, etc. 370,910,368 682,771,493 636,258,160 595,310,637 491,162,865 389,166,558

Legal expenses 2,937,164 10,026,077 7,765,350 5,557,719 3,734,352 3,793,766

Postage, stamp, telecommunication, etc. 59,329,228 112,913,781 110,621,818 90,270,298 72,441,274 57,155,524

Stationery, printing, advertisement, etc. 82,828,306 174,091,810 175,827,492 101,292,102 102,027,782 78,189,160

Managing Director's salary 7,560,000 13,852,500 13,660,000 13,660,000 7,952,581 7,560,000

Directors' fees 653,250 1,104,250 1,364,750 1,004,927 1,405,750 1,575,000

Auditors' fees 693,448 1,790,934 1,765,215 900,000 700,000 500,000

Charges on loan loss - 69,825,108 - 35,777,187 - 309,582,157

Depreciation and repair of bank's assets 198,387,855 442,183,292 402,991,215 304,576,225 273,093,112 222,996,681

Other expenses 378,329,250 728,138,397 669,117,684 579,826,799 385,940,869 256,500,562

Total operating expenses 2,167,004,221 4,468,279,355 4,494,997,552 3,638,776,355 3,127,454,735 2,918,031,046 Operating profit 2,096,742,273 3,611,703,397 3,152,855,031 2,985,193,635 3,231,888,698 2,877,906,462

Share of profit of joint ventures/associates 160,802,922 240,124,663 255,341,372 258,876,010

Profit before provision 2,257,545,195 3,851,828,059 3,408,196,403 3,244,069,645 3,231,888,698 2,877,906,462

Provision for loans, investments and other assets

Specific provision 544,977,094 1,750,235,571 407,783,326 (145,290,413) 1,660,964,465 419,136,905

General provision 54,020,684 205,000,000 260,000,000 49,392,000 (33,000,000) 180,500,000

Provision for off-Shore Banking unit (3,963,732) 1,000,000 4,000,000 9,600,000 (6,500,000)

Provision for off-balance sheet exposure 61,499,892 - 50,000,000 63,220,000 1,500,000 30,000,000

Provision for diminution in value of investments 156,852,496 68,164,349 (248,438,949) 235,566,751 193,710,375

Other provisions 11,403,255 26,181,570 26,000,000 27,672,054 (47,210,375) 252,000,000

Total Provision 824,789,689 2,050,581,490 499,344,377 240,160,392 1,769,464,465 881,636,905

Profit/(Loss) before taxes 1,432,755,506 1,801,246,569 2,908,852,026 3,003,909,254 1,462,424,233 1,996,269,557

Provision for taxation

Current tax 864,688,286 966,255,904 1,301,314,763 1,101,878,414 1,006,863,357 1,124,301,106

Deferred tax expense/(income) (240,368,158) (222,150,537) (157,542,995) 272,221,188 (678,279,860) 40,177,069

624,320,128 744,105,367 1,143,771,768 1,374,099,602 328,583,497 1,164,478,175

Net profit after taxation 808,435,378 1,057,141,202 1,765,080,258 1,629,809,652 1,133,840,736 831,791,382 Net profit after tax attributable to:

Equity holders of the Bank 808,435,469 1,057,141,126 1,765,080,014 1,629,809,652 1,133,840,736 831,791,382 Non-controlling interest (91) 76 244

Retained earnings brought forward from previous year 2,817,321,961 2,739,798,432 2,081,124,597 1,338,904,558 1,313,594,106 1,442,650,839

Profit available for appropriation 3,625,757,430 3,796,939,558 3,846,204,611 2,968,714,210 2,447,434,842 2,274,442,221 Appropriations

Statutory reserve 253,785,089 322,992,707 535,428,019 541,542,242 278,016,584 372,295,115

General reserve - - -

Dividend - 656,624,890 570,978,160 346,047,370 830,513,700 588,553,000

253,785,089 979,617,597 1,106,406,179 887,589,612 1,108,530,284 960,848,115

Retained surplus 3,371,972,341 2,817,321,961 2,739,798,432 2,081,124,597 1,338,904,558 1,313,594,106 Earnings Per Share (EPS) 1.61 2.10 3.51 3.72 2.98 2.40




Page | 36

Annexure-E The Consolidated Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years

IFIC Bank Limited

Consolidated Balance Sheet

Amount in BDT

Particulars 30 June 2016 31 Dec 2015 31 Dec 2014 (*) 31 Dec 2013 (*) 31 Dec 2012 (*) 31 Dec 2011 (*) PROPERTY AND ASSETS

Cash 13,738,307,449 11,883,940,873 10,402,677,369 9,694,857,863 9,582,866,983 6,635,590,876

Cash in hand (including foreign currency) 1,659,085,024 1,648,726,967 1,833,243,747 2,027,983,219 1,793,372,821 1,182,959,978

Balance with Bangladesh Bank and its agent bank(s) (including foreign

currency) 12,079,222,425 10,235,213,906 8,569,433,622 7,666,874,644 7,789,494,162 5,452,630,899

Balance with other banks and financial institutions 10,696,417,081 5,717,048,302 12,049,563,141 10,028,352,857 5,158,506,347 3,026,169,941

In Bangladesh 8,351,492,805 3,827,088,364 11,214,966,414 8,755,055,635 3,497,911,209 1,827,212,084 Outside Bangladesh 2,344,924,276 1,889,959,938 834,596,727 1,273,297,223 1,660,595,138 1,198,957,857

Money at call and on short notice 600,000,000 - 1,450,000,000 - 950,000,000 100,000,000

Investments 25,414,943,798 29,113,754,270 23,332,137,187 21,498,051,492 15,790,328,606 12,371,855,426

Government securities 19,902,907,126 23,596,892,752 17,217,294,297 15,893,691,348 11,311,623,934 8,101,539,970 Other investments 5,512,036,672 5,516,861,518 6,114,842,890 5,604,360,145 4,478,704,672 4,270,315,456


Loans, cash credit, overdrafts etc. 123,038,539,016 116,635,497,917 96,670,129,520 79,899,715,032 71,546,062,534 58,345,351,229

Bills purchased and discounted 8,960,462,953 9,032,541,721 7,749,268,149 6,121,024,498 6,900,219,263 7,082,998,135

Fixed assets including premises, furniture and fixtures 3,578,965,574 3,244,881,023 2,946,853,254 2,404,374,060 2,367,569,482 2,215,123,119 Other assets 5,724,571,647 4,736,254,172 3,371,653,934 3,632,099,174 3,165,491,453 2,142,739,278 Non-banking assets 373,474,800 373,474,800 373,474,800 373,474,800 - -

Total assets 192,125,682,317 180,737,393,078 158,345,757,354 133,651,949,776 115,461,044,668 91,919,828,003


Borrowing from other banks, financial Institutions and agents 5,391,936,776 7,493,454,676 5,924,591,258 3,840,822,447 1,111,976,655 1,418,845,663 Subordinated debt 3,500,000,000 - - - - - Deposits and other accounts 153,563,694,395 146,848,211,304 129,863,053,203 110,676,026,933 92,481,115,043 73,042,234,330

Current deposit and other accounts 18,720,697,161 17,440,029,998 15,582,027,154 13,568,293,800 11,588,588,434 10,191,080,240 Bills payable 2,350,923,777 1,473,570,630 1,874,975,364 1,573,829,454 1,492,411,159 1,306,622,259 Savings bank deposits 26,205,220,198 24,496,108,248 18,366,462,687 13,890,792,353 11,468,553,820 10,031,541,483 Fixed deposits 106,286,853,259 103,438,502,428 94,039,587,998 81,643,111,325 67,931,561,631 51,512,990,348

Other liabilities 16,539,751,786 14,025,345,914 11,359,482,025 9,686,289,613 14,047,408,901 10,649,844,590



Paid up capital 5,034,124,170 5,034,124,170 4,377,499,280 3,806,521,120 3,460,473,750 2,768,379,000

Statutory reserve 4,486,284,969 4,232,499,880 3,909,507,173 3,374,079,154 2,832,536,912 2,554,520,330 General reserve 155,071,397 155,071,397 55,771,397 55,771,397 55,771,397 55,771,397 Revaluation reserve against securities 2,639,546 41,391,939 1,575,539 16,043,518 17,604,715 1,323,882 Revaluation reserve against fixed assets 115,314,704 115,314,704 115,314,704 115,314,704 115,314,704 115,314,704 Foreign currency translation reserve (35,115,198) (25,350,388) (843,101) (50,909) (67,967) Surplus in profit and loss account 3,371,972,342 2,817,321,961 2,739,798,432 2,081,124,597 1,338,904,558 1,313,594,106

13,130,291,930 12,370,373,663 11,198,623,424 9,448,803,582 7,820,538,069 6,808,903,420

Non-controlling interest 7,429 7,521 7,445 7,201 6,000 - Total shareholders' equity 13,130,299,359 12,370,381,184 11,198,630,869 9,448,810,783 7,820,544,069 6,808,903,420

Total liabilities and shareholders' equity 192,125,682,317 180,737,393,078 158,345,757,355 133,651,949,776 115,461,044,668 91,919,828,003

Page | 37

Annexure-E The Consolidated Statement of Assets and Liabilities of the Bank as at 30 June 2016 and for immediately preceding five years

IFIC Bank Limited

Consolidated Balance Sheet

Amount in BDT


OFF BALANCE SHEET ITEMS Contingent liabilities 54,021,989,160 47,779,027,775 47,824,432,743 42,304,360,063 36,502,077,421 36,232,714,657

Acceptances and endorsements 17,865,901,197 14,210,761,791 17,819,035,175 13,876,907,522 11,672,883,029 12,949,639,891 Letters of guarantee 9,554,723,447 9,706,631,662 6,644,832,531 6,340,226,700 5,717,606,179 4,112,823,270 Irrevocable letters of credit 15,393,596,728 14,800,324,793 14,473,667,235 14,442,618,436 12,272,437,515 11,606,768,727 Bills for collection 11,207,767,788 9,061,309,529 8,886,897,802 7,644,607,405 6,839,150,698 7,563,482,770

Other contingent liabilities - - -

Other commitments - - - - - -

Documentary credit and short term trade -related transactions - - - - - - Forward assets purchased and forward deposit placed - - - - - - Undrawn note issuance and revolving underwriting facilities - - - - - -

Undrawn formal standby facilities, credit lines and other commitments - - - - - - -

Total off-Balance Sheet exposures including contingent liabilities 54,021,989,160 47,779,027,775 47,824,432,743 42,304,360,063 36,502,077,421 36,232,714,657


Sd/- 27 July 2016 M. J. Abedin & Co. Dhaka Chartered Accountants

Page | 38

Annexure-F The Consolidated Statement of Cash Flows of the Bank for the half year ended 30 June 2016 and for immediately preceding five years

IFIC Bank Limited Consolidated Cash Flow Statement

Amount in BDT


A. Cash flows from operating activities Interest received 7,113,832,271 14,766,733,413 13,817,897,656 12,912,892,803 10,520,385,971 6,798,012,560

Interest payments (4,171,143,125) (8,978,636,056) (8,725,747,399) (8,506,445,840) (7,658,802,706) (4,654,632,244)

Dividend received 47,171,108 161,080,469 106,248,532 84,956,377 53,213,728 121,086,707

Fees and commission received 787,024,756 1,512,245,117 1,423,651,023 1,321,242,455 1,151,880,094 1,349,339,988

Recoveries of loans and advances previously written-off 97,612,716 91,978,387 194,316,107 648,876,150 175,200,118 70,309,771 Cash payments to employees (1,072,935,352) (2,295,434,213) (2,509,285,867) (1,894,260,460) (1,639,222,255) (1,448,571,638)

Cash payments to suppliers (170,630,573) (254,380,826) (237,324,678) (155,073,176) - -

Income taxes paid (690,684,934) (1,046,898,362) (1,207,026,021) (1,031,213,745) (872,717,004) (673,042,758)

Receipts from other operating activities 354,047,836 528,027,210 558,278,918 583,233,062 2,292,666,344 2,111,820,727

Payments for other operating activities (784,912,269) (1,471,425,558) (1,360,786,595) (1,381,330,651) (1,124,007,033) (797,164,302)

Operating cash flows before changing in operating assets and liabilities 1,509,382,434 3,013,289,582 2,060,221,676 2,582,876,976 2,898,597,257 2,877,158,811


Statutory deposits - - - - -

Loans and advances to other banks - - - - -

Loans and advances to customers (5,598,833,550) (20,618,792,622) (17,382,343,208) (8,900,941,822) (14,017,932,433) (17,602,093,106)

Other assets 64,547,558 (1,163,194,963) 225,964,975 (474,177,862) 342,626,717 1,326,869,629

Deposits from other banks (839,474,000) 306,602,000 (225,339,000) (279,194,397) 300,353,000 497,139,000

Deposits from customers 7,619,336,862 16,717,220,821 19,627,437,222 15,578,131,084 17,132,649,997 17,647,600,781

Trading liabilities - - - - (298,830,132) (84,800,424)

Other liabilities 82,820,611 168,405,715 677,084,529 197,553,393 662,468,608 (1,110,936,099)

1,328,397,480 (4,589,759,050) 2,922,804,518 6,121,370,395 4,121,335,757 673,779,780

Net cash flows from/(used in) operating activities 2,837,779,914 (1,576,469,468) 4,983,026,194 8,704,247,371 7,019,933,014 3,550,938,591


Net proceeds/(payments) from sale/(purchase) of Government securities 3,655,233,232 (6,154,867,151) (1,255,048,849) (4,216,501,213) 18,000,000 18,000,000

Net proceeds/(payments) from sale/(purchase) of securities 4,824,846 611,567,060 (743,310,039) (1,089,525,840) (254,215,397) (2,331,652,770)

Purchase of property, plant & equipment (448,995,739) (739,401,777) (833,798,051) (227,827,068) (328,522,475) (191,660,966) Proceeds from sale of property, plant & equipment 1,151,968 2,817,834 3,253,511 4,912,148 1,437,731 11,974,410

Net cash used in investing activities 3,212,214,307 (6,279,884,033) (2,828,903,428) (5,528,941,973) (563,300,140) (2,493,339,326)

C. Cash flows from financing activities

Borrowing from other banks, financial institution and agents (2,101,517,900) 1,568,863,417 2,083,768,811 640,162,802 (239,765,188) 1,064,650,425

Receipts from issue of sub-ordinated bond 3,500,000,000 - -

Dividend paid (cash) - - -

Payment against lease obligation (3,054,249) (6,642,120) (7,263,378) (5,140,413)

Net cash flow from financing activities 1,395,427,852 1,562,221,297 2,076,505,433 635,022,389 (239,765,188) 1,064,650,425

D. Net increase/(decrease) in cash (A+B+C) 7,445,422,073 (6,294,132,204) 4,230,628,198 3,810,327,786 6,216,867,686 2,122,249,690 E. Effects of exchange rate changes on cash and cash equivalents (14,328,118) (5,215,931) (52,101,507) (50,562,494)

F. Opening balance of cash and cash equivalents 17,608,744,275 23,908,092,411 19,729,565,720 15,969,800,428 9,752,932,743 7,630,683,052 G. Closing balance of cash and cash equivalents (D+E+F) 25,039,838,230 17,608,744,275 23,908,092,411 19,729,565,721 15,969,800,428 9,752,932,742


Sd/-



Page | 39

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF IFIC BANK LIMITED

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of IFIC Bank Limited and

its subsidiaries (the “Group”)as well as the separate financial statements of IFIC Bank Limited(the

“Bank”), which comprise the consolidated and the separate balance sheet as at 30 June 2016 and

the consolidated and separate profit and loss accounts, consolidated and separate statements of

changes in equity and consolidated and separate cash flow statements for the period then ended,

and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements and Internal Controls

Management is responsible for the preparation of consolidated financial statements of the Group

and separate financial statements of the Bank that give a true and fair view in accordance with

Bangladesh Financial Reporting Standards as explained in note 2.1.1 and for such internal control

as management determines necessary to enable the preparation of consolidated financial

statements of the Group and separate financial statements of the Bank that are free from material

misstatement, whether due to fraud or error. The Bank Company Act, 1991 as amended and the

Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal

control and risk management functions of the Bank. The Management is also required to make a

self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank

on instances of fraud and forgeries.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements of the Group

and the separate financial statements of the Bank based on our audit. We conducted our audit in

accordance with Bangladesh Standards on Auditing. Those standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about whether

the consolidated financial statements of the Group and separate financial statements of the Bank

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the consolidated financial statements of the Group and separate financial statements

of the Bank. The procedures selected depend on the auditors’ judgment, including the assessment

of the risks of material misstatement of the consolidated financial statements of the Group and

separate financial statements of the Bank, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation of

consolidated financial statements of the Group and separate financial statements of the Bank that

give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control. An audit also includes evaluating the appropriateness of accounting policies used

and the reasonableness of accounting estimates made by management, as well as

Page | 40

evaluating the overall presentation of the consolidated financial statements of the Group and

separate financial statements of the Bank.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion

Other Matter

We have audited the financial statements of subsidiary of the Bank, IFIC Securities Limited and

another subsidiary of the Bank, IFIC Money Transfer (UK) Limited has been audited by Ahmed

& Co. Chartered Accountants and unqualified opinion was expressed on both the financial

statements and those financial statements have been properly reflected in the consolidated

financial statements of the Group.

Opinion

In our opinion, the consolidated financial statements of the Group and separate financial

statements of the Bank give a true and fair view of the consolidated financial position of the Group

and separate financial position of the Bank as at 30 June 2016, and of its consolidated and separate

financial performance and its consolidated and separate cash flows for the period then ended in

accordance with Bangladesh Financial Reporting Standards as explained in note 2.1.1.

Report on Other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, the Securities and Exchange Rules 1987, the Bank

Company Act, 1991 as amended and the rules and regulations issued by Bangladesh Bank, we also

report the following:

(a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof.

(b) to the extent noted during the course of our audit work performed on the basis stated under

the Auditors’ Responsibility section in forming the above opinion on the consolidated

financial statements of the Group and separate financial statements of the Bank and

considering the reports of the Management to Bangladesh Bank on anti-fraud internal

controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial Statements and Internal Control:

i) internal audit, internal control and risk management arrangements of the Group and

the Bank as disclosed in note 2.2.6.10 of the financial statements appeared to be

materially adequate;

ii) nothing has come to our attention regarding material instances of forgery or irregularity

or administrative error and exception or anything detrimental committed by employees

of the Bank and its related entities other than matters disclosed in note 2.2.6.10 (V);

(c) in our opinion, proper books of account as required by law have been kept by the Group and

the Bank so far as it appeared from our examination of those books;

Page | 41

(d) the consolidated balance sheet and profit and loss account of the Group and the separate

balance sheet and profit and loss account of the Bank dealt with by the report are in

agreement with the books of account;

(e) the expenditure incurred was for the purposes of the Bank’s business;

(f) the consolidated financial statements of the Group and separate financial statements of the

Bank have been drawn up in conformity with prevailing rules, regulations and accounting

standards as well as with related guidance issued by Bangladesh Bank;

(g) adequate provisions have been made for advances and other assets which are, in our opinion,

doubtful of recovery;

(h) the records and statements submitted by the branches have been properly maintained and

consolidated in the financial statements;

(i) the information and explanation required by us have been received and found satisfactory; (j) Capital to Risk Weighted Assets Ratio (CRAR) as required by the Bangladesh Bank has been

maintained adequately during the period and

(k) we have reviewed over 80% of the risk weighted assets of the bank and we have spent around

2,850 person hours for the audit of the books and accounts of the bank.

Sd/- 27 July 2016 M. J. ABEDIN & CO


Page | 42

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Consolidated Balance Sheet

as at 30 June 2016 Amount in BDT

Particulars Note 30 June 2016 31 December 2015

PROPERTY AND ASSETS Cash 13,738,307,449 11,883,940,873

Cash in hand (including foreign currency) 3.a 1,659,085,024 1,648,726,967

Balance with Bangladesh Bank and its agent bank(s) (including foreign

currency) 3.b 12,079,222,425 10,235,213,906

Balance with other banks and financial institutions 4.a 10,696,417,081 5,717,048,302

In Bangladesh 4.a(i) 8,351,492,805 3,827,088,364 Outside Bangladesh 4.a(ii) 2,344,924,276 1,889,959,938

Money at call and on short notice 5 600,000,000 -

Investments 25,414,943,798 29,113,754,270

Government securities 6.a 19,902,907,126 23,596,892,752 Other investments 6.b 5,512,036,672 5,516,861,518

Loans and advances 131,999,001,969 125,668,039,638

Loans, cash credit, overdrafts etc. 7.a 123,038,539,016 116,635,497,917 Bills purchased and discounted 8.a 8,960,462,953 9,032,541,721

Fixed assets including premises, furniture and fixtures 9.a 3,578,965,574 3,244,881,023

Other assets 10.a 5,724,571,647 4,736,254,172

Non-banking assets 11 373,474,800 373,474,800

Total assets 192,125,682,317 180,737,393,078


Borrowing from other banks, financial institutions and agents 12.a 5,391,936,776 7,493,454,676

Subordinated debt 13 3,500,000,000 -

Deposits and other accounts 14.a 153,563,694,395 146,848,211,304

Current deposit and other accounts 18,720,697,161 17,440,029,998 Bills payable 2,350,923,777 1,473,570,630

Savings bank deposits 26,205,220,198 24,496,108,248

Fixed deposits 106,286,853,259 103,438,502,428

Other liabilities 15.a 16,539,751,786 14,025,345,914

Total liabilities 178,995,382,957 168,367,011,894

Capital/Shareholders' equity Paid up capital 16.2 5,034,124,170 5,034,124,170

Statutory reserve 17 4,486,284,969 4,232,499,880

General reserve 18 155,071,397 155,071,397

Revaluation reserve against securities 19.a 2,639,546 41,391,939

Revaluation reserve against fixed assets 20 115,314,704 115,314,704

Foreign currency translation reserve 20.a (35,115,198) (25,350,388)

Surplus in profit and loss account 22 3,371,972,342 2,817,321,961

13,130,291,930 12,370,373,663

Non-controlling interest 23 7,430 7,521


Total liabilities and shareholders' equity 192,125,682,317 180,737,393,078

Page | 43

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Consolidated Balance Sheet



OFF BALANCE SHEET ITEMS Contingent liabilities 24 54,021,989,160 47,779,027,775

Acceptances and endorsements 24.1 17,865,901,197 14,210,761,791

Letters of guarantee 24.2 9,554,723,447 9,706,631,662

Irrevocable letters of credit 24.3 15,393,596,728 14,800,324,793

Bills for collection 24.4 11,207,767,788 9,061,309,529

Other contingent liabilities - -

Other commitments - -

Documentary credit and short term trade -related transactions - -

Forward assets purchased and forward deposit placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities, credit lines and other commitments - -

Total off-Balance Sheet exposures including contingent liabilities 54,021,989,160 47,779,027,775

These interim financial reports should be read in conjunction with the annexed notes.

Sd/- Sd/- Sd/- Sd/-

Managing Director Director Director Director

Signed as per our annexed report of same date

Sd/-

27 July 2016 M. J. Abedin & Co. Dhaka Chartered Accountants

Page | 44

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Consolidated Profit and Loss Account for the half year ended 30 June 2016

Amount in BDT

Particulars Note 1 January to 1 January to 1 April to 1 April to

30 June 2016 30 June 2015 30 June 2016 30 June 2015

Interest income 26.a 6,235,093,122 6,244,966,296 3,033,007,049 3,247,708,676

Interest paid on deposits, borrowings etc. 27.a 4,146,262,177 4,357,390,927 1,978,856,270 2,207,851,129

Net Interest income 2,088,830,945 1,887,575,369 1,054,150,779 1,039,857,547

Investment income 28.a 1,094,778,901 1,140,003,881 533,220,639 538,768,496

Commission, exchange and brokerage 29.a 775,733,422 799,109,107 398,163,721 436,400,140

Other operating income 30.a 304,403,226 262,883,455 176,164,503 148,866,703

2,174,915,549 2,201,996,443 1,107,548,863 1,124,035,338

Total operating income 4,263,746,494 4,089,571,811 2,161,699,642 2,163,892,885

Salaries and allowances 31.a 1,065,375,352 1,031,700,924 550,432,634 557,895,779

Rent, taxes, insurance, electricity etc. 32.a 370,910,368 333,575,942 177,370,373 162,991,409

Legal expenses 33.a 2,937,164 6,195,435 1,623,429 2,005,101

Postage, stamp, telecommunication etc. 34.a 59,329,228 53,119,091 42,943,104 28,885,603

Stationery, printing, advertisement etc. 35.a 82,828,306 85,661,876 40,590,695 40,739,053

Managing Director's salary 36 7,560,000 6,030,000 3,967,500 3,015,000

Directors' fees 37.a 653,250 413,750 370,750 323,750

Auditors' fees 38.a 693,448 646,898 547,164 646,898

Charges on loan loss 39 - - - -

Depreciation and repair of bank's assets 40.a 198,387,855 190,933,633 103,561,281 100,388,809

Other expenses 41.a 378,329,250 292,532,153 201,825,672 156,070,554

Total operating expenses 2,167,004,221 2,000,809,700 1,123,232,602 1,052,961,954

Operating profit 2,096,742,273 2,088,762,111 1,038,467,039 1,110,930,931

Share of profit of joint ventures/associates 41.b 160,802,922 125,953,298 56,987,956 (32,757,944)

Profit before provision 2,257,545,195 2,214,715,410 1,095,454,995 1,078,172,986

Provision for loans, investments & other assets 42.a

Specific provision 544,977,094 593,937,858 119,268,328 222,588,783

General provision 54,020,684 180,000,000 62,157,800 130,000,000

Provision for off-shore banking unit (3,963,732) - 3,265,361 -

Provision for off-balance sheet exposures 61,499,892 (10,000,000) 34,695,516 -

Provision for diminution in value of investments 156,852,496 11,768,037 28,775,800 (29,858,416)

Provision for other assets 11,403,255 22,775,569 4,469,644 12,775,569

Total provision 824,789,689 798,481,465 252,632,449 335,505,936

Profit/(Loss) before taxes 1,432,755,506 1,416,233,945 842,822,546 742,667,051

Provision for taxation Current tax 43.a 864,688,286 904,673,513 462,084,840 451,741,160

Deferred tax 43.b (240,368,158) (208,424,298) (136,462,694) (77,936,198)

624,320,128 696,249,215 325,622,146 373,804,961

Net profit after taxation 808,435,378 719,984,731 517,200,400 368,862,089

Net profit after tax attributable to:

Equity holders of the Bank 808,435,469 719,984,814 517,200,527 368,861,985

Non-controlling interest (91) (83) (127) 104

Retained earnings brought forward from previous period 2,817,321,961 2,739,798,432 3,108,556,903 3,090,921,260

Add: Net profit after tax (attributable to equity holders of the Bank) 808,435,469 719,984,814 517,200,527 368,861,985

Profit available for appropriation 3,625,757,430 3,459,783,246 3,625,757,430 3,459,783,246

Appropriations:

Statutory reserve 253,785,089 272,144,502 253,785,089 272,144,502

General reserve - - - - Dividend - 656,624,890 - 656,624,890

253,785,089 928,769,392 253,785,089 928,769,392 Retained surplus 3,371,972,341 2,531,013,853 3,371,972,341 2,531,013,853

Earnings Per Share (EPS) 50.a 1.61 1.43 1.03 0.73


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Page | 45

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Consolidated Cash Flow Statement for the half year ended 30 June 2016

Amount in BDT

Particulars Note 1 January to 1 January to

30 June 2016 30 June 2015

A. Cash flows from operating activities

Interest received 7,113,832,271 7,274,874,422

Interest payments (4,171,143,125) (4,516,183,653)

Dividend received 47,171,108 126,065,708

Fees and commission received 787,024,756 783,890,871

Recoveries of loans and advances previously written-off 97,612,716 64,055,287

Cash payments to employees (1,072,935,352) (1,217,730,924)

Cash payments to suppliers (170,630,573) (19,894,183)

Income taxes paid (690,684,934) (524,554,011)

Receipts from other operating activities 44.a 354,047,836 289,056,705

Payments for other operating activities 45.a (784,912,269) (741,836,197)

Operating cash flows before changing in operating assets and liabilities 1,509,382,434 1,517,744,024

Increase/(decrease) in operating assets and liabilities Statutory deposits - -

Loans and advances to other banks - -

Loans and advances to customers (5,599,015,643) (7,369,397,407)

Other assets 47.a 64,547,558 (745,034,049)

Deposits from other banks (839,474,000) (415,902,000)

Deposits from customers 7,619,336,862 4,301,034,500

Trading liabilities - -

Other liabilities 48.a 83,002,704 233,547,207

1,328,397,480 (3,995,751,749)

Net cash flows from/(used in) operating activities 2,837,779,914 (2,478,007,726)


Net proceeds/(payments) from sale/(purchase) of Government securities 3,655,233,232 104,071,480

Net proceeds/(payments) from sale/(purchase) of securities 4,824,846 513,782,278

Purchase of property, plant & equipment (448,995,739) (247,797,704)

Proceeds from sale of property, plant & equipment 1,151,968 2,244,031

Net cash used in investing activities 3,212,214,307 372,300,085

C. Cash flows from financing activities Borrowing from other banks, financial institutions and agents (2,101,517,900) 1,308,878,529

Receipts from issue of sub-ordinated bond 3,500,000,000 -

Dividend paid (cash) - -

Payment against lease obligation (3,054,249) (3,405,207)

Net cash flows from financing activities 1,395,427,852 1,305,473,322

D. Net increase/(decrease) in cash (A+B+C) 7,445,422,073 (800,234,318)

E. Effects of exchange rate changes on cash and cash equivalents (14,328,118) (146,444,817)

F. Opening balance of cash and cash equivalents 17,608,744,275 23,908,092,411

G. Closing balance of cash and cash equivalents (D+E+F) 46.a 25,039,838,230 22,961,413,276

Closing cash and cash equivalents Cash in hand 1,659,085,024 1,915,971,631

Balance with Bangladesh Bank and its agents bank 12,079,222,425 9,991,650,725

Balance with other banks and financial institutions 10,696,417,081 9,547,958,019

Money at call and on short notice 600,000,000 1,500,000,000

Prize bonds 5,113,700 5,832,900

25,039,838,230 22,961,413,276


Page | 46

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Consolidated Statement of Changes in Equity

for the half year ended 30 June 2016

Amount in BDT Revaluation Revaluation

Foreign Surplus in Non-

Statutory

currency

Particulars Paid up capital General reserve reserve against reserve against profit and loss controlling Total

reserve

translation

securities fixed assets account interest

reserve

Restated balance as at 1 January 2016 5,034,124,170 4,232,499,880 155,071,397 41,391,939 115,314,704 (25,350,388) 2,817,321,961 7,521 12,370,381,184

Impact of changes in accounting policy - - - - - - - - -

Restated balance as at 1 January 2016 5,034,124,170 4,232,499,880 155,071,397 41,391,939 115,314,704 (25,350,388) 2,817,321,961 7,521 12,370,381,184

Surplus/(deficit) on account of revaluation of investments

- - - (38,752,394) - - - - (38,752,394)

Effect of foreign currency translation - - - - - (9,764,810) - - (9,764,810)

Transfer from provision to general reserve - - - - - - - - -

Net gains and losses not recognized in the profit and 5,034,124,170 4,232,499,880 155,071,397 2,639,546 115,314,704 (35,115,198) 2,817,321,961 7,521 12,321,863,981 loss account

Net profit for the period - - - - - - 808,435,470 (91) 808,435,379

Dividend issued/paid during the period - - - - - - - - -

Transfer to statutory reserve - 253,785,089 - - - - (253,785,089) - -

Balance as at 30 June 2016 5,034,124,170 4,486,284,969 155,071,397 2,639,546 115,314,704 (35,115,198) 3,371,972,342 7,430 13,130,299,360

- - 39,756,693 (152,431,851) 112,675,158 - (1) -

Balance as at 1 January 2015 4,377,499,280 3,909,507,173 55,771,397 1,575,539 115,314,704 (843,101) 2,739,798,432 7,445 11,198,630,869

Impact of changes in accounting policy - - - - - - - - -

Restated balance as at 1 January 2015 4,377,499,280 3,909,507,173 55,771,397 1,575,539 115,314,704 (843,101) 2,739,798,432 7,445 11,198,630,869

Surplus/(deficit) on account of revaluation of investments - - - 14,767,514 - - - - 14,767,514

Effect of foreign currency translation - - - - - (21,786,561) - - (21,786,561)

Net gains and losses not recognized in the profit and 4,377,499,280 3,909,507,173 55,771,397 16,343,053 115,314,704 (22,629,662) 2,739,798,432 7,445 11,191,611,823

loss account

Net profit for the period - - - - - - 719,984,814 (83) 719,984,731

Dividend issued/paid during the period 656,624,890 - - - - - (656,624,890) - -

Transfer to statutory reserve - 272,144,502 - - - - (272,144,502) - -

Balance as at 30 June 2015 5,034,124,170 4,181,651,676 55,771,397 16,343,053 115,314,704 (22,629,662) 2,531,013,854 7,362 11,911,596,554

Page | 47

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Balance Sheet



PROPERTY AND ASSETS Cash 3 13,719,881,805 11,861,355,635

Cash in hand (including foreign currency) 3.1 1,640,659,380 1,626,141,729

Balance with Bangladesh Bank and its agent bank(s) (including foreign currency) 3.2 12,079,222,425 10,235,213,906

Balance with other banks and financial institutions 4 10,680,738,738 5,710,545,217

In Bangladesh 4.1 8,351,492,804 3,827,088,363

Outside Bangladesh 4.2 2,329,245,934 1,883,456,854

Money at call and on short notice 5 600,000,000 -

Investments 6 24,648,486,203 28,497,856,878

Government securities 6.1 19,902,907,126 23,596,892,752 Other investments 6.2 4,745,579,077 4,900,964,126

Loans and advances 7 129,356,565,436 123,268,667,873

Loans, cash credit, overdrafts etc. 7.1 120,396,102,483 114,236,126,152 Bills purchased and discounted 8 8,960,462,953 9,032,541,721

Fixed assets including premises, furniture and fixtures 9 3,566,700,203 3,230,366,926

Other assets 10 6,407,752,502 5,391,684,061

Non-banking assets 11 373,474,800 373,474,800

Total assets 189,353,599,687 178,333,951,390


Borrowing from other banks, financial Institutions and agents 12 5,046,243,835 7,200,813,714

Subordinated debt 13 3,500,000,000 -

Deposits and other accounts 14 153,584,566,933 146,819,705,532

Current deposit and other accounts 14.1 18,741,569,699 17,411,524,226 Bills payable 14.2 2,350,923,777 1,473,570,630

Savings bank deposits 14.3 26,205,220,198 24,496,108,248

Fixed deposits 14.4 106,286,853,259 103,438,502,428

Other liabilities 15 14,948,034,413 12,659,218,849

Total liabilities 177,078,845,181 166,679,738,095


Paid up capital 16.2 5,034,124,170 5,034,124,170 Statutory reserve 17 4,486,284,969 4,232,499,880

General reserve 18 155,071,397 155,071,397

Revaluation reserve against securities 19 2,639,546 41,391,939

Revaluation reserve against fixed assets 20 115,314,704 115,314,704

Surplus in profit and loss account 21 2,481,319,720 2,075,811,205


Total liabilities and shareholders' equity 189,353,599,687 178,333,951,390

Page | 48

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Balance Sheet



OFF BALANCE SHEET ITEMS

Contingent liabilities 24 54,021,989,160 47,779,027,775

Acceptances and endorsements 24.1 17,865,901,197 14,210,761,791

Letters of guarantee 24.2 9,554,723,447 9,706,631,662

Irrevocable letters of credit 24.3 15,393,596,728 14,800,324,793

Bills for collection 24.4 11,207,767,788 9,061,309,529

Other contingent liabilities - -

Other commitments - -

Documentary credit and short term trade -related transactions - -

Forward assets purchased and forward deposit placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities, credit lines and other commitments - -

Total off-Balance Sheet exposures including contingent liabilities 54,021,989,160 47,779,027,775 These interim financial reports should be read in conjunction with the annexed notes.

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INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Profit and Loss Account

for the half year ended 30 June 2016 Amount in Taka Amount in BDT

Particulars Note 1 January to 1 January to 1 April to 1 April to

30 June 2016 30 June 2015 30 June 2016 30 June 2015

Interest income 26 6,183,111,784 6,219,482,802 3,029,983,550 3,239,443,570

Interest paid on deposits, borrowings, etc. 27 4,126,226,558 4,338,502,794 2,005,598,718 2,197,042,624

Net Interest income 2,056,885,226 1,880,980,008 1,024,384,832 1,042,400,946

Investment income 28 1,087,500,243 1,223,757,278 525,941,981 538,725,596

Commission, exchange and brokerage 29 735,630,242 734,761,039 379,608,003 391,385,506

Other operating income 30 304,338,628 262,787,443 176,138,386 158,575,696

2,127,469,113 2,221,305,760 1,081,688,370 1,088,686,798 Total operating income 4,184,354,339 4,102,285,768 2,106,073,202 2,131,087,743

Salaries and allowances 31 1,053,469,934 1,018,888,430 544,304,021 550,957,633

Rent, taxes, insurance, electricity, etc. 32 363,026,513 326,211,984 172,710,006 159,070,422

Legal expenses 33 2,411,500 5,503,827 1,230,750 1,716,361

Postage, stamp, telecommunication, etc. 34 59,244,725 53,048,943 42,886,976 38,585,169

Stationery, printing, advertisement, etc. 35 82,707,382 85,051,709 40,593,402 40,378,075

Managing Director's salary 36 7,560,000 6,030,000 3,967,500 3,015,000

Directors' fees 37 544,000 385,000 296,000 295,000

Auditors' fees 38 500,000 400,000 500,000 400,000

Charges on loan loss 39 - - - -

Depreciation and repair of bank's assets 40 196,762,162 188,936,034 102,742,451 99,393,092

Other expenses 41 366,708,174 278,387,046 196,858,328 147,990,879

Total operating expenses 2,132,934,390 1,962,842,973 1,106,089,434 1,041,801,629

Profit/(Loss) before provision 2,051,419,949 2,139,442,795 999,983,767 1,089,286,114

Provision for loans, investments and other 42

assets

Specific provision 502,681,909 575,944,713 76,973,142 233,365,206

General provision 54,020,684 180,000,000 62,157,800 130,000,000

Provision for off-Shore Banking unit (3,963,732) - 3,265,361 -

Provision for off-balance sheet exposure 61,499,892 (10,000,000) 34,695,516 -

Provision for diminution in value of investments 156,852,496 10,000,000 28,967,757 (30,000,000)

Other provisions 11,403,255 22,775,569 4,469,644 12,775,569

Total Provision 782,494,504 778,720,283 210,529,220 346,140,775

Profit/(Loss) before taxes 1,268,925,446 1,360,722,513 789,454,547 743,145,339

Provision for taxation 43 Current tax 850,000,000 900,000,000 450,000,000 450,000,000

Deferred tax expense/(income) (240,368,158) (208,424,298) (136,462,694) (77,936,198)

609,631,842 691,575,702 313,537,306 372,063,802

Net profit after taxation 659,293,604 669,146,811 475,917,241 371,081,538

Retained earnings brought forward from previous period 2,075,811,205 2,168,447,775 2,259,187,568 2,466,513,048

Appropriations 2,735,104,809 2,837,594,586 2,735,104,809 2,837,594,586

Statutory reserve 253,785,089 272,144,502 253,785,089 272,144,502 General reserve - - - - Dividend - 656,624,890 - 656,624,890

253,785,089 928,769,392 253,785,089 928,769,392

Retained surplus 2,481,319,720 1,908,825,194 2,481,319,720 1,908,825,194

Earnings Per Share (EPS) 50 1.31 1.33 0.95 0.74 These interim financial reports should be read in conjunction with the annexed notes.

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INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Cash Flow Statement

for the half year ended 30 June 2016 Amount in BDT

Particulars Note 1 January to 1 January to

30 June 2016 30 June 2015

A. Cash flows from operating activities

Interest received 7,061,850,933 7,249,390,928

Interest payments (4,151,107,506) (4,497,295,520)

Dividend received 39,908,812 126,022,808

Fees and commission received 748,032,818 734,761,039

Recoveries of loans and advances previously written-off 97,612,716 64,055,287

Cash payments to employees (1,061,029,934) (1,204,918,430)

Cash payments to suppliers (170,630,573) (19,894,183)

Income taxes paid (686,656,881) (524,554,011)

Receipts from other operating activities 44 353,966,876 288,917,794

Payments for other operating activities 45 (764,373,549) (718,679,563)

Operating cash flows before changing in operating assets and liabilities 1,467,573,712 1,497,806,147


Statutory deposits - -

Loans and advances to other banks - -

Loans and advances to customers (5,451,088,026) (7,426,677,912)

Other assets 47 30,180,633 (764,232,094)

Deposits from other banks (839,474,000) (415,902,000)

Deposits from customers 7,668,715,172 4,436,563,569

Trading liabilities - -

Other liabilities 48 (142,587,606) 41,369,483

1,265,746,173 (4,128,878,954)

Net cash flows from/(used in) operating activities 2,733,319,885 (2,631,072,807)


Net proceeds/(payments) from sale/(purchase) of Government securities 3,655,233,232 104,071,480

Net proceeds/(payments) from sale/(purchase) of securities 155,385,049 555,939,277

Purchase of property, plant & equipment (448,985,139) (247,917,194)

Proceeds from sale of property, plant & equipment 1,151,968 2,244,031

Net cash used in investing activities 3,362,785,110 414,337,594

C. Cash flows from financing activities Borrowing from other banks, financial institution and agents (2,154,569,879) 1,266,986,446

Receipts from issue of sub-ordinated bond 3,500,000,000 -

Dividend paid (cash) - -

Payment against lease obligation (3,054,249) (3,405,207)

Net cash flow from financing activities 1,342,375,873 1,263,581,239

D. Net increase/(decrease) in cash (A+B+C) 7,438,480,868 (953,153,974)

E. Effects of exchange rate changes on cash and cash equivalents (12,402,576) (6,969,598)

F. Opening balance of cash and cash equivalents 17,579,655,952 23,897,497,667

G. Closing balance of cash and cash equivalents (D+E+F) 46 25,005,734,243 22,937,374,095

Closing cash and cash equivalents Cash in hand 1,640,659,380 1,915,926,079

Balance with Bangladesh Bank and its agents bank 12,079,222,425 9,991,650,725

Balance with other banks and financial institutions 10,680,738,738 9,523,964,390


Prize bonds 5,113,700 5,832,900

25,005,734,243 22,937,374,095


Page | 51

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Statement of Changes in Equity


Amount in BDT

Revaluation Revaluation

Statutory General

Surplus in profit

Particulars Paid up capital reserve against reserve against Total reserve reserve and loss account

securities fixed assets

Balance as at 1 January 2016 5,034,124,170 4,232,499,880 155,071,397 41,391,939 115,314,704 2,075,811,205 11,654,213,295

Impact of changes in accounting policy - - - - - - -

Restated balance as at 1 January 2016 5,034,124,170 4,232,499,880 155,071,397 41,391,939 115,314,704 2,075,811,205 11,654,213,295

Surplus/deficit on account of revaluation of investments - - - (38,752,394) - - (38,752,394)

Effect of foreign currency translation - - - - - - -

Net gains and losses not recognized in the income 5,034,124,170 4,232,499,880 155,071,397 2,639,546 115,314,704 2,075,811,205 11,615,460,902

statement

Net profit for the period - - - - - 659,293,604 659,293,604

Dividend issued/paid during the period - - - - - - -

Transfer to statutory reserve - 253,785,089 - - - (253,785,089) -

Balance as at 30 June 2016 5,034,124,170 4,486,284,969 155,071,397 2,639,546 115,314,704 2,481,319,720 12,274,754,506

Balance as at 1 January 2015 4,377,499,280 3,909,507,173 55,771,397 1,575,539 115,314,704 2,168,447,775 10,628,115,868

Impact of changes in accounting policy - - - - - -

Restated balance as at 1 January 2015 4,377,499,280 3,909,507,173 55,771,397 1,575,539 115,314,704 2,168,447,775 10,628,115,868

Surplus/deficit on account of revaluation of investments - - - 14,767,514 - - 14,767,514

Effect of foreign currency translation - - - - - - -

Net gains and losses not recognized in the income 4,377,499,280 3,909,507,173 55,771,397 16,343,053 115,314,704 2,168,447,775 10,642,883,382

statement

Net profit for the period - - - - - 669,146,811 669,146,811

Dividend issued/paid during the period 656,624,890 - - - - (656,624,890) -

Transfer to statutory reserve - 272,144,502 - - - (272,144,502) -

Balance as at 30 June 2015 5,034,124,170 4,181,651,676 55,771,397 16,343,053 115,314,704 1,908,825,194 11,312,030,194

Page | 52

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED

Liquidity Statement

Maturity Analysis of Assets and Liabilities

as at 30 June 2016

Amount in BDT

Particulars Maturity Period

Up to 1 month 1 to 3 months 3 to 12 months 1 to 5 years Above 5 years Total

Assets

Cash in hand (including Bangladesh Bank) 3,816,481,805 132,800,000 132,800,000 - 9,637,800,000 13,719,881,805

Balance with other banks and financial institutions 6,671,247,211 3,850,000,000 159,491,527 - - 10,680,738,738

Money at call and on short notice 600,000,000 - - - - 600,000,000

Investment 3,038,258,401 4,059,336,445 1,373,789,797 8,367,386,949 7,809,714,611 24,648,486,203


Fixed assets including premises, furniture and fixture 356,670,020 535,005,030 1,426,680,081 1,248,345,071 3,566,700,203

Other assets 1,033,354,221 2,245,165,505 1,033,354,221 1,264,306,615 831,571,940 6,407,752,502

Non-banking assets - - - 373,474,800 - 373,474,800

Total assets 42,710,439,183 33,956,185,977 42,170,399,871 37,032,622,400 33,483,952,255 189,353,599,687

Liabilities -

Subordinated debt - - - 1,400,000,000 2,100,000,000 3,500,000,000

Borrowing from other banks, financial institutions and 889,092,353 1,781,002,401 2,038,000,633 338,148,447 - 5,046,243,835

agents

Deposits and other accounts 25,380,396,982 30,950,128,010 36,368,216,324 43,661,088,961 17,224,736,657 153,584,566,933

Other liabilities 1,020,181,328 138,264,605 2,155,110,501 1,454,309,747 10,180,168,231 14,948,034,413


Net liquidity 15,420,768,520 1,086,790,962 1,609,072,413 (9,820,924,755) 3,979,047,367 12,274,754,506

Page | 53

Notes to the Financial Statements as at and for the half year ended 30 June 2016

1 Legal status and nature of the Bank 1.1 IFIC Bank Limited

IFIC Bank Limited denoted as International Finance Investment and Commerce Bank Limited (hereinafter referred to as "the

Bank" / "IFIC "), started its journey in 1976 at the instance of the Government as a joint venture between the Government of

Bangladesh and sponsors in the private sector with the objective of working as a finance company. In 1983 when the Government

allowed to open up banking in the private sector, the finance company was converted into a full fledge commercial bank and

incorporated as a public limited company in Bangladesh under the Companies Act 1913, currently governed under the Bank

Companies Act 1991 as amended and rules and regulations issued by Bangladesh Bank. The registered office and principal

place of business of the Bank is situated at BDBL Bhaban (8th - 10th & 16th-19th floors), 8 Rajuk Avenue, Dhaka-1000. Its

shares are listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. The Government of the People's

Republic of Bangladesh now holds 32.75% share of the Bank. Directors and Sponsors hold 8.48% share and the remaining

58.77% share held by the institutions and general public. The Bank has 130 branches and 59 own ATM booths with 68 ATMs as on 30 June 2016. The Bank has an Off-shore Banking Unit (OBU) located at Dhaka and also two subsidiary companies (note-1.4) namely IFIC Securities Limited and IFIC Money

Transfer (UK) Limited (hereinafter together referred to as "the Group"). Moreover, the Bank has investment in two joint venture/associate companies (note-1.5) in abroad namely Nepal Bangladesh Bank Limited, Nepal and Oman International Exchange LLC, Oman. The Bank has also investment in another company in abroad namely NIB Bank Limited, Pakistan.

1.2 Nature of business activities The principal activities of the Bank are to provide all types of commercial banking services, within the stipulations laid down by Bank Companies Act 1991 and directives as received from Bangladesh Bank time to time, through its branches, SME centre and alternative delivery channels like ATM Booths, Mobile and Internet Banking etc.

1.3 Off-shore Banking Unit (OBU)

Off-shore Banking Unit (OBU) is a separate business unit of IFIC Bank Limited . Bank obtained permission for OBU operations from Bangladesh Bank vide its letter no. BRPD (P-3) 744 (104)/2009-4233 dated 17 November 2009. The unit commenced its operation from 19 May 2010. Presently the Bank has one Off-shore Banking Unit in Bangladesh. The OBU is governed under

the rules and regulations of Bangladesh Bank. Separate Financial Statements of the Bank have been prepared including the affairs of OBU. Separate Financial Statements of Off –shore Banking Unit are shown in Annexure-K.

1.4 Subsidiaries of the Bank

1.4.1 IFIC Securities Limited

IFIC Securities Limited, a fully owned subsidiary company of IFIC Bank Limited was incorporated as a public limited company in

Bangladesh on 2 November 2010 vide certificate of incorporation no. C-87904/10 having registered office at BDBL Bhaban 8th

floor, 8 Rajuk Avenue, Dhaka-1000. The total paid up capital of IFIC Securities Limited is BDT 800 million divided into 80 million

shares of BDT 10 each; out of which IFIC Bank Limited holds 79,999,400 shares (99.99%). It acquired membership of Dhaka

Stock Exchange Limited for brokerage transaction vide Bangladesh Security Exchange Commission (BSEC) certificate no.

3.1/DSE-192/2009/316 dated 1 January 2009. The main objectives of the company is to carry out the business of stock brokers/

dealers relating to dealing of shares and securities as well as other services as mentioned in the Memorandum and Articles of

Association of the company. The operation of the company starts on 10 March 2011. Separate Financial Statements of IFIC

Securities Limited are shown in Annexure-L. 1.4.2 IFIC Money Transfer (UK) Limited

IFIC Money Transfer (UK) Limited was incorporated as a private limited company with Companies House of England and Wales under registration no. 07379137 on 16 September 2010. The total paid up capital of IFIC Money Transfer (UK) Limited is GBP 300,000. The company is a wholly owned subsidiary of IFIC Bank Limited. IFIC Money Transfer (UK) Limited obtained Money Laundering registration on 17 January 2011 issued by HM Customs and Excise. The company got registration from Financial Services Authority (FSA) on 16 June 2011 under Payment Services Regulations 2009. The company commenced its operation

on 31 August 2011. The registered office of the company is located at Ferrari House, 2nd Floor, 102 College Road, Harrow,

Middlesex, United Kingdom HAI IES, London, UK. The Bank has obtained necessary permission from Bangladesh Bank to open the fully owned subsidiary in UK. Financial Statements of the company are shown in Annexure-M.

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1.5 Joint Ventures/Associates of the Bank 1.5.1 Nepal Bangladesh Bank Limited (NBBL)

Nepal Bangladesh Bank Limited (NBBL) was incorporated in Nepal and registered with Office of Company Registrar (50-050/051, dated 14 January 1994) as a public company limited by shares. NBBL was established as a joint venture bank with IFIC Bank Ltd., Bangladesh. The Bank started its banking business from 06 June 1994.

IFIC holds 40.91% shares capital of Nepal Bangladesh Bank Ltd. (NBBL) of Nepal which is listed with Nepal Stock Exchange Limited. The Bank's total holding is 12,433,412 number of shares out of 30,392,119 number of shares of the Bank. The face value of the share is NRS 100 each.

1.5.2 Oman International Exchange (OIE) LLC

Oman International Exchange (OIE) LLC, an exchange company incorporated under the laws of the Sultanate of Oman having

its registered office at Saif Bin Salim Road (Hamriya), RUWI. It was established in 1985 as a joint venture between IFIC Bank

Limited and Oman Nationals, to facilitate remittance by Bangladeshi wage earners in Oman. The affairs and business of the

company is run and managed by the Bank under a Management Contract. IFIC Bank holds 25% shares and the balance 75%

is held by the Omani sponsors. Out of total 11,793 shares of the company, IFIC Bank owns 2,948 shares of which face value is

RO 100 per share. 1.6 Investment in NIB Bank Ltd, Pakistan

IFIC Bank established two branches in Pakistan, one at Karachi and the other at Lahore. Karachi Branch was opened on 26th April 1987, while the Lahore Branch was opened on 23 December 1993.

Since late 1990s, the State Bank of Pakistan (SBP) revised the Minimum Capital Requirement (MCR) for banks in Pakistan time to

time. To meet the MCR, a new bank has been incorporated in Pakistan in 2003 titled NDLC-IFIC Bank Ltd. (subsequently renamed as

NIB Bank Ltd.) Thereafter, our Pakistan branches and a local leasing company, NDLC were amalgamated with the NIB. Consequently,

our Pakistan Branches ceased to exist effective from 03 October 2003 with the commencement of operation of the new bank. Out of

total number of 10,302,851,200 shares of NIB, IFIC Bank owns 24,578,800 shares.

2 Basis of preparation and significant accounting policies 2.1 Basis of preparation

2.1.1 Statement of compliance

The separate financial statements of the Bank and the consolidated financial statements of the Group comprising the Bank and its

subsidiaries as at and for the half year ended 30 June 2016 have been prepared on a going concern basis in accordance with the "First

Schedule" (section 38) of the Bank Companies Act 1991, as amended by the BRPD Circular no. 14 dated 25 June 2003, rules &

regulations issued by Bangladesh Bank time to time, the Companies Act 1994, Financial Reporting Act 2015, the

Bangladesh Securities and Exchange Rules 1987, listing regulations of Dhaka and Chittagong Stock Exchanges’, International Financial Reporting Standards (IFRSs) as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh as Bangladesh Financial Reporting Standards (BFRSs) except in the circumstances where local regulations differ, and with other applicable laws and regulations applicable in Bangladesh.

In case the requirement of provisions and circulars issued by Bangladesh Bank differ with those of other regulatory authorities and BFRSs, the provisions and circulars issued by Bangladesh Bank have been applied. As such the Group and the Bank has departed from contradictory requirements of BFRSs in order to comply with the rules and regulations of Bangladesh Bank. Material departure from the requirements of BFRSs vis-a-vis Bangladesh Bank regulations are as follows:

i) Investment in shares and securities

BFRS: As per requirements of BAS 39 investment in shares and securities generally falls either under “at fair value through profit and loss account” or under “available for sale” where any change in the fair value (as measured in accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise investments are recognized at cost.

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ii) Revaluation gains/losses on Government securities

BFRS: As per requirement of BAS 39 where securities will fall under the category of Held for Trading (HFT), any change in the fair value of those assets are recognized through profit and loss account. Securities designated as Held to Maturity (HTM) are measured at amortized cost method and interest income is recognized through the profit and loss account.

Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of

securities which have not matured as at the balance sheet date are recognized in other reserves as a part of equity and any

losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss

account. Interest on HFT securities including amortization of discount are recognized in the profit and loss account. HTM

securities which have not matured as at the balance sheet date are amortized at the year end and gains or losses on amortization

are recognized in other reserve as a part of equity. iii) Provision on loans and advances/investments

BFRS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets that are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD circular No.14 dated 23 September 2012, BRPD circular No. 19 dated 27 December 2012, BRPD

circular no 16 dated 18 November 2014 and BRPD circular No. 05 dated 29 May 2013 a general provision at 0.25% to 5% under

different categories of unclassified/standard loans has to be maintained regardless of objective evidence of impairment. Also provision

for sub-standard loans, doubtful loans and bad loss has to be provided at 20%, 50% and 100% respectively depending on the duration

of past due of loans and advances. Again general provision at 1% is required to be provided for all off-balance sheet exposures. As

per BRPD Circular No.-04 dated 29 January 2015, 1% additional provision have to be maintained for large restructured loan. Such

provision policies are not specifically in line with those prescribed by BAS 39.

iv) Recognition of interest in suspense

BFRS: Loans and advances to customers are generally classified as 'loans and receivables' as per BAS 39 and interest income is recognized through effective interest rate method over the term of the loan. Once a loan is impaired, interest income is recognized in profit and loss account on the same basis based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognized as income, rather the corresponding amount transferred/credited to an interest in suspense account and shown as liability in the balance sheet.

v) Other comprehensive income BFRS: As per BAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a single Other Comprehensive Income statement.

Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The template of financial statements issued by Bangladesh Bank neither include OCI nor the elements of OCI are allowed to be included in a single OCI Statement. As such the Bank does not prepare the OCI statement. However, elements of OCI, if any, are shown in the statements of changes in equity.

vi) Financial instruments – presentation and disclosure

In several cases Bangladesh Bank guidelines categorise, recognize, measure and present financial instruments differently from those prescribed in BAS 39. As such full disclosure and presentation requirements cannot be made in the financial statements as per BFRS 7 and BAS 32.

vii) Financial guarantees

BFRS: As per BAS 39, financial guarantee is a contracts that require an entity to make specified payments to reimburse the

holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt

instrument. Financial guarantees are recognized as liability initially and recorded at fair value and the initial fair value is amortized

over the life of the financial guarantee. The liability of financial guarantee is subsequently carried at the higher of this amortized

amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial

guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14, financial guarantees such as letter of credit, letter of guarantee will be treated as off-balance sheet items. No liability is recognized for the guarantee except the cash margin.

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viii) Cash and cash equivalent

BFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7.

Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, treasury bills, Bangladesh Bank bills and prize bond are not shown as cash and cash equivalents. Money at call and on short notice presented on the face of the balance sheet, and treasury bills, prize bonds are shown in investments.

ix) Non-banking asset

BFRS: No indication of Non-banking asset is found in any BFRS. Bangladesh Bank: As per BRPD circular number 14, there must exist a face item named Non-banking asset.

x) Cash flow statement

BFRS: The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular number 14, cash flow is the mixture of direct and indirect methods.

xi) Balance with Bangladesh Bank: (Cash Reserve Requirement)

BFRS: As per BAS 7, Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations. Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

xii) Presentation of intangible asset

BFRS: Intangible asset must be identified, recognized and disclose in the financial statements as per BAS

38. Bangladesh Bank: There is no regulation for intangible assets in BRPD circular number 14.

xiii) Off-balance sheet items BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet.

Bangladesh Bank: As per BRPD circular number 14, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet.

xiv) Loans and advances/Investments net off provision BFRS: Loans and advances/Investments should be presented in the financial statements after net off provision.

Bangladesh Bank: As per BRPD circular number 14, provision for loans, advances and investments are presented separately as liability and can not be netted off against the outstanding balance of loans, advances and investment.

2.1.2 Basis of measurement

The financial statements of the Group and the Bank have been prepared on historical cost basis except the following:

- Government Treasury Bills and Bonds considered as 'Held for Trading (HFT)' are measured at present value using mark to market with gains credited directly to revaluation reserve but loss charged to Profit and Loss Account. - Government Treasury Bills and Bonds considered as 'Held to Maturity (HTM)' at present value using amortization concept. - Zero Coupon Bond at present value using amortization concept. - Land is recognized at cost at the time of acquisition and subsequently measured at fair value as per BAS-16, "Property Plant

and Equipment".

2.1.3 Reporting period

These consolidated and separate interim financial reports cover half year from 1 January to 30 June which has been followed consistently over the period. The reporting period of the subsidiaries and other two joint ventures/associates are also same as that of the Parent i.e. IFIC Bank except NBBL. However the reporting period for financial statements of NBBL has been adjusted with regard to the reporting period of the Parent.

2.1.4 Directors’ responsibility statement

The Board of Directors is responsible for the preparation and presentation of the financial statements under section 183 of the Companies Act, 1994 .

2.1.5 Date of authorization The Board of Directors has authorized these financial statements for public issue on 27 July 2016.

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2.1.6 Functional and presentation currency

The consolidated financial statements of the Group and the separate financial statements of the Bank are presented in

Bangladeshi Taka (BDT/BDT) which is the Group's and the Bank's functional currency. Functional currency of Off-shore Banking Unit and IFIC Money Transfer (UK) Limited is US Dollar (USD) and Great Britain Pound (GBP) respectively. Functional currency for two joint ventures/associates - OIE LLC and NBBL is Omani Rial and Nepalese Rupee respectively. Financial information

presented in BDT has been rounded off to nearest integer, except otherwise indicated. 2.1.7 Use of estimates and judgments

In the preparation of the consolidated financial statements of the group and the separate financial statements of the Bank in conformity with BFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the measurement of assets, liabilities, income and expenses. Accordingly, actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. The key estimates, judgments and assumptions are applied to measure the following:

a) Provision for loans, advances and investments b) Revaluation of land & buildings c) Deferred tax assets/liabilities d) Measurement of defined benefit obligation (Provision for gratuity) e) Provision for expenses f) Provision for current taxation g) Contingent Liability (Letter of Guarantee)

2.1.8 Going concern The Bank has no such reason to assume that it will not be able to continue its operation for foreseeable future because it has adequate resources in all respects, promising profitability, and forward looking strategy. For this reason, the directors continue

to adopt going concern basis in preparing the financial statements. The current operations of the Bank provide

sufficient funds to meet the present requirements of its existing businesses and operations. 2.1.9 Basis of consolidated and separate financial statements

The financial statements of the Bank includes the Consolidated Financial Statements of the Bank as a Group of Bank and its

subsidiaries and the Separate Financial Statements of the Bank as the stand-alone entity. The consolidated financial statements

include the financial statements of the Bank and its two subsidiary companies namely, IFIC Securities Limited operating in

Bangladesh and IFIC Money Transfer (UK) Limited operating in United Kingdom made up to the end of the half year. The

separate financial statements are derived by combining the financial statements of main operation of IFIC Bank Limited and the

financial statements of Off-shore Banking Unit operating in Bangladesh.

The consolidated and separate financial statements have been prepared in accordance with BAS 27: Separate Financial

Statements and BFRS 10: Consolidated Financial Statements . The consolidated financial statements are prepared to a common

half year ended 30 June 2016. Since the reporting period of one of the joint ventures/associates NBBL is different from that of

the parent so necessary adjustments have been made to the financial results of NBBL for consolidation. Both consolidated

financial statements and separate financial statements of the Bank comprises Balance Sheet, Profit & Loss Statement, Cash Flow Statement, Statement of Changes in Equity and relevant notes and disclosures.

2.1.9.1 Subsidiary Subsidiary is the entity which is controlled by the Bank. Control exists when the Bank has the power, directly or indirectly, to govern the financial and operating policies of an entity, so as to obtain economic benefits from its activities.

The consolidated financial statements incorporate the financial statements of IFIC Bank Limited and financial statements of subsidiary companies from the date that control commences until the date that control ceases. The financial statements of such subsidiary companies are incorporated on a line by line basis and investment held by the bank is eliminated against the corresponding share capital of subsidiaries in the consolidated financial statements.

2.1.9.2 Transactions eliminated on consolidation

All intra-group transactions, balances and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gain, but only to the extent that there are no evidence of impairment.

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2.1.10 Cash flow statement

Cash flow statement has been prepared in accordance with BAS 7 "Cash Flow Statement" and under the guideline of Bangladesh Bank BRPD Circular no. 14 dated 25 June 2003.

2.1.11 Statement of changes in equity Statement of changes in equity has been prepared in accordance with BAS 1 "Presentation of Financial Statements" and following the guidelines of Bangladesh Bank BRPD Circular no. 14 dated 25 June 2003.

2.1.12 Liquidity statement

The liquidity statement has been prepared in accordance with the remaining maturity grouping of the value of the assets and liabilities as on the reporting date under the guidelines of Bangladesh Bank BRPD Circular No. 14 dated 25 June 2003. Following bases are used for preparation of the statement:

Particulars Basis

Balance with other Banks and financial institutions Maturity term

Money at call and on short notice Maturity term

Investments Respective residual maturity

Loans and advances Repayment schedule

Fixed assets Useful lives

Other assets Realization / amortization Borrowing from other Banks, financial institutions Maturity / repayment terms Deposits and other accounts Maturity term and past trend of withdrawal Provisions and other liabilities Payment / adjustments schedule

2.1.13 Prior period adjustments

The Bank started to follow equity method of accounting for its investment in joint ventures, associates in line with BAS 28: Investment

in Associates and Joint Venture from the year 2014. As per equity method of accounting the investment in equity accounted investees

i.e. joint ventures or associates the initial recognition is to be made at cost and carrying amount is to be changed by share of the post

acquisition profit earned by the investees subject to adjustment for the share of distributions made from those investees. At the time of

calculation of investment in equity accounted investees in the half year ended 30 June 2015 (i.e. joint ventures and associates) the

distributions received from equity accounted investees in the form of cash dividend was not eliminated in the consolidated financial

statements . As such the same has been adjusted in the half year ended 30 June 2016 as per BAS 8: Accounting Policies, Changes

in Accounting Estimates and Errors. The same was also adjusted retrospectively at the time of preparation of annual financial

statements for the year ended 31 December 2015 and disclosed accordingly. As a result, in the consolidated financial statements the net profit has been adjusted by BDT83.80 million and investment in equity

accounted investees has also been adjusted for the same amount along with related effect of exchange rate differences. Due to the

above adjustments Consolidated Earnings Per Share (EPS) and Net Asset Value (NAV) per share adjusted by 0.17 and 0.17

respectively. However, the separate financial statements of the Bank are not affected by these changes. The details of investment in joint ventures can be found at note no. 41(b).

2.2 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by group entities except otherwise instructed by the Central Bank as prime regulator. Certain comparative amounts in the financial statements have been reclassified and rearranged to conform to the current period’s presentation.

2.2.1 Materiality and aggregation

Each material item considered by management as significant has been presented separately in the financial statements. No amount has been set off unless the Bank has a legal right to set off such amount and intends to settle on net basis. Income and expenses are presented on a net basis only when permitted by the relevant financial reporting standards.

2.2.2 Foreign currency 2.2.2.1 Foreign currency transactions

Foreign currency transactions are translated into the Bank's functional currency at the exchange rates prevailing on the respective date of such transactions as per BAS 21 "The Effect of Changes in Foreign Exchange Rates" . Monetary assets and liabilities in foreign currencies at the reporting date are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank. Foreign exchange differences are generally recognized in the profit and loss account.

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2.2.2.2 Foreign operations

The assets and liabilities of foreign operations are translated to BDT at spot exchange rates prevailing at the reporting date. The

income and expenses of foreign operations are translated at spot exchange rates at the date of transactions as long as

practicable, otherwise average rate of exchange has been used. Foreign currency differences arising on translation are

recognized and presented directly in the foreign currency translation reserve in equity. If the settlement of a monetary item

receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, then foreign currency

differences arising on the item form part of the net investment in the foreign operation and are recognized in other comprehensive

income and accumulated in the translation reserve within equity. 2.2.3 Offsetting

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

2.2.4 Assets and basis of their measurement

2.2.4.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and its agent bank, balance with other banks and financial institutions, money at call and on short notice and such other highly liquid financial assets which are subject to insignificant risk of changes in their value and are used by the Bank management for its short term commitments.

2.2.4.2 Investment

Investments (except government treasury bill and bond) have been initially recognized at cost, including acquisition charges associated with the investment. Premiums have been amortized and discount accredited by using the effective or historical yield method. Government Treasury Bills and Bonds (categorized as HFT and/or HTM) are accounted for as per Bangladesh Bank DOS circular letter no. 05 dated 26 May 2008 and DOS circular no. 05 dated 28 January 2009. The valuation methods of investment used are :

i) Govt. securities - Held to Maturity (HTM) Investments which are intended to be held to maturity are classified as “Held to Maturity”. These are measured at amortized cost at each period end by taking into account any discount or premium in acquisition. Amortized amount of such premium are booked into Profit and Loss Statement or discount is booked to reserve until maturity/disposal.

ii) Govt. securities - Held for Trading (HFT)

Investment primarily held for selling/trading is classified in this category. After initial recognition, investments are revalued weekly basis on mark to market policy. Decrease in the book value is recognized in the profit and loss statement and any increase is transferred to revaluation reserve account.

Value of investments has been enumerated as follows :

Investment class Initial recognition Measurement after initial

Recording of changes

recognition

Govt. securities - HFT Cost Market value

Loss to profit and loss account and gain

to revaluation reserve

Increase in value to equity and decrease Govt. securities - HTM Cost Amortized value

to equity as long as there are balances

available otherwise to profit & loss

account.

Debenture Face value Face value None

Prize bond Cost Cost None

iii) Investment in quoted shares/securities

These shares/securities are bought and held primarily for the purpose of selling in future or for dividend income. Investment in quoted

shares/securities are revalued at the end of the reporting period and necessary provisions are maintained for diminution in value of

investments in quoted shares/securities. Realized gains or losses are recognized in the profit and loss account.

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iv) Investment in unquoted shares/securities Investment in unquoted shares/securities are initially recognized at cost and revalued based on book value of last audited balance sheet.

v) Investment in subsidiary Investment in subsidiary is accounted for under the cost method of accounting in the Bank’s financial statements in accordance with the BAS 27: Separate Financial Statements and BFRS 3: Business Combination.

vi) Investment in associates and joint ventures

Associates are those entities in which the Bank has significant influence, but not control, over the financial and operating policies. Joint

ventures are those entities over whose activities the Bank has joint control, established by contractual agreement and requiring

unanimous consent for strategic, financial and operating decisions. Associates and joint ventures are accounted for using the equity

method (equity accounted investees). The consolidated financial statements include the IFIC Bank Limited's share of the profit and

loss of equity accounted investees, after adjustments to align the accounting policies with those of the IFIC Bank Limited, from the date

that significant influence or joint control commences until the date that significant influence or joint control ceases. This is consistent

with BFRS 11: Joint Arrangements and BFRS 12: Disclosure of Interests in other Entities.

vii) Repo and reverse repo

The Bank recorded the Repo and reverse repo transactions in compliance with the DOS Circular No. 06, dated 15 July 2010 of Bangladesh Bank. In case of repo for both coupon and non-coupon bearing securities, the Bank adjust the revaluation reserve account for HFT securities and cease the weekly revaluation of such securities if the revaluation date falls within the repo period. For interest bearing securities, the Bank does not accrue interest during the repo period.

2.2.4.3 Loans and advances

i) Loans and advances have been stated at gross value as pre requirements of Bank Companies Act, 1991 as amended. General provisions on unclassified loans and contingent assets, specific provisions for classified loans and interest suspense thereon are shown under other liabilities.

ii) Provision for loans and advances are made on the basis of information furnished by the branches and instructions contained in

Bangladesh Bank BRPD circular No. 14 dated 23 September 2012, BRPD circular No. 19 dated 27 December 2012, BRPD circular No. 16 dated 18 November 2014 and BRPD circular no. 05 dated 29 May 2013. As per BRPD Circular No.-04 dated 29 January 2015, 1% additional provision has to be maintained for restructured large loan.

iii) Interest is calculated on classified loans and advances as per BRPD Circular No. 14 dated 23 September 2012 and recognized

as income on realization.

The classification rates are given below: Particulars Rate of Provision

General Provision on:

i) Unclassified loans and advances Short term agricultural and micro-credits whether irregular or regular 2.50%

Small and medium enterprise (SME) 0.25%

Consumer Finance for housing finance and loans for professionals to set up business under 2.00%

Consumer Financing

Loans to Brokerage House, Merchant Banks, Stock Dealers, etc. 2.00%

Consumer Finance other than housing finance and loans for professionals to set up business 5.00%

under Consumer Financing including credit cards

All other unclassified loans and advances 1.00%

ii) Special Mention Account Same rate applicable as per

above particulars (0.25%-

5.00%). Additional 1% for

restructured large loan

iii) Off Balance Sheet Exposure 1.00%

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Specific Provision on classified loans & advances:

Substandard loans and advances other than short term agricultural and micro-credits whether 20.00%

irregular or regular

Substandard short term agri credit 5.00%

Doubtful loans and advances other than short term agricultural and micro-credits whether 50.00%

irregular or regular

Doubtful short term agri credit 5.00%

Bad/loss loans and advances 100.00%

iv) Loans and advances are written off to the extent that (i) there is no realistic prospect of recovery, and (ii) against which legal

cases are filed and classified as bad/loss for more than five years as per guidelines of Bangladesh Bank. These write off however, will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such write off accounts are meticulously maintained and followed up.

2.2.4.4 Stock of stationery Stock of stationery has been shown under other assets and is valued at cost.

2.2.4.5 Fixed assets and depreciation A. Acquisition through outright purchase

i) Fixed assets are stated at cost/revalued amount less accumulated depreciation for those acquired through outright purchase.

Depreciation is computed consistently by using diminishing balance method at the following rates:

Particulars Rate of depreciation Land Nil

Building 2.5%

Wooden Furniture 20%

Steel Furniture 10%

Office Equipment 20%

Computer 30% Electrical & Gas Equipment 20% Leasehold improvement 20% Vehicles 20%

Soft furnishing 40%

Software 30%

ii) Depreciation is charged from when the assets become ready to be used and no depreciation is charged when the asset is disposed. Land and building are revalued in sufficient regularity and gain/(loss) on revaluation recognized in equity under the head 'Revaluation reserve against fixed assets' in the financial statements.

B. Acquisition under finance lease

Assets acquired under finance lease are stated at cost less accumulated depreciation. Leased assets are depreciated in a consistent and systematic basis among the useful life. The useful life of leased assets are determined considering its economic life and lease term, whichever is lower.

2.2.4.6 Intangible assets Intangible assets are identifiable non-monetary assets without physical substance. It comprises the value of computer application software licensed for the Bank, other than software applied to the operating systems of computers. An intangible

asset is recognized if it is probable that future economic benefits that are attributable to the asset will flow to the Bank over a period of time and the cost of the asset can be measured reliably as per BAS 38: Intangible Assets . Intangible assets acquired separately are recorded on initial recognition at costs and are carried at cost less accumulated amortization and accumulated impairment losses, if any. Subsequent expenditure on intangible asset

Subsequent expenditure on intangible asset is capitalized only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditures are charged as expense to the profit and loss account as and when they are incurred.

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Amortization of intangible asset

Intangible assets are amortized on diminishing method to the profit and loss account from the year when the asset is available for use. Intangible asset i.e. acquisition cost of the computer application software is amortized at the rate 30% every year.

2.2.4.7 Impairment of assets

An asset is impaired when its carrying amount exceeds its recoverable amount as per BAS 36: Impairment of Assets. The Bank

assesses at the end of each reporting period whether there is any indication that an asset may be impaired. The impairment test

is also made whenever events or changes in circumstances indicate that the carrying value of the asset may not be recovered.

If any such indication exists, the Bank makes an estimate of the recoverable amount of such assets. Upon estimation, if the

recoverable amount is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and

resultant impairment losses are recognized in the profit and loss account.

However, the Bank has no such condition which makes any indication that might be suggestive for a heightened risk of existence of impairment at the reporting date.

2.2.4.8 Leasing Leases are classified as finance leases when risk and rewards substantially transferred to the lessee whether title of lease assets eventually transfer or not as per BAS 17: Leases.

i) The Bank as lessor The Bank has finance lease under its credit portfolio. Amount disbursed to lessees under finance lease is recorded as lease at constant periodic rate of return on the Bank's net investment outstanding in respect of the leases as per BAS 17: Leases.

ii) The Bank as lessee

Assets acquired under lease arrangement where substantially all the risks and rewards incidental to ownership are transferred

to the lessees i.e. IFIC Bank Limited, are treated as finance lease and recognized as leased assets of the Bank as per BAS 17:

Leases . Leased assets are stated at their fair value at the date of acquisition or, if lower, at the present value of the minimum

lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation. Lease

payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of

interest on the remaining balance of the liability. Finance charges are charged directly in profit & loss. 2.2.5 Liabilities, provisions and basis of their measurement

2.2.5.1 Borrowings from other banks, financial institutions and agents

Borrowing funds include call money deposits, borrowings under re-finance scheme and other short term and long term borrowings from banks and financial institutions. Interest paid/payable on these borrowings is charged to the profit and loss accounts.

2.2.5.2 Deposits and other accounts

Deposits and other accounts include interest and non-interest bearing demand and time deposits received from the customers/depositors in the form of current, savings and term deposits etc. Interest paid/payable is charged to the profit and loss account.

2.2.5.3 Provision for taxation i) Current tax

Provision for taxation has been made as per Income Tax Ordinance, 1984 on the profit made by the bank after considering taxable add backs of income and disallowances of expenditure as per tax laws as well as excess or deficit in provision made in previous years/periods.

ii) Deferred tax

Deferred tax is calculated as per BAS 12: Income Taxes on taxable/deductible temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base used in the

computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred

tax assets are recognized to the extent that it is probable that the taxable profits will be available against which the deductible

temporary differences, unused tax losses and tax credits can be utilized. 2.2.5.4 Provision for liabilities

A provision is recognized in the balance sheet when the Bank has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37: Provisions, Contingent Liabilities and Contingent Assets.

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2.2.5.5 Provision for Nostro Account

Provision for Nostro accounts is maintained as per Circular Letter No. FEPD(FEMO)/01/2005-677 dated 13 September 2005 issued by Foreign Exchange Policy Department of Bangladesh Bank.

2.2.5.6 Employee benefits Accounting recognition and measurement, as well as the disclosures requirements for different benefit schemes for employees are the followings:

i) Provident fund

The Bank operates a contributory provident fund for its permanent employees in accordance with the registered provident fund rules.

The Commissioner of Income Tax, Dhaka has approved the Provident fund as a recognized fund as per Income Tax Ordinance 1984.

All permanent employees of the Bank are contributing 10% of their basic salary as subscription of the fund and the Bank also contributes

equal amount to the fund. The fund is operated by a Board of Trustees consisting of 5 (five) members

of the Bank. Interest earned from the investments is credited to the members’ account on half yearly basis. ii) Gratuity

Gratuity benefits are given to the employee of the Bank in accordance with the registered gratuity fund rules. National Board of

Revenue (NBR) has recognized the gratuity fund with effect from October 2007. The fund is operated by a Board of Trustees consisting of 5 (five) members of the Bank. Employees are entitled to gratuity benefit after completion of minimum 10 (ten) years of service.

2.2.5.7 Off-balance sheet items

Under general banking transactions liabilities against acceptance, endorsement and other obligations and bills against which acceptance has been given and claim exists there against have been shown as off balance sheet items. General provision at the rate 1% has been made for the off balance sheet exposures as per instruction contained in Bangladesh Bank BRPD circular No. 14 dated 23 September 2012.

2.2.5.8 Revenue recognition

As per Bangladesh Accounting Standard (BAS) 18: Revenue , revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Bank and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be measured reliably. The revenue during the period is recognized following BAS 18: Revenue as detailed below:

i) Interest income

In terms of BAS 18: Revenue the interest income is recognized on accrual basis. Interest on loans and advances ceases to be taken into income when such advances are classified. Interest on classified loans and advances is kept into interest suspense account. Loan and advances are classified as bad, interest ceases to apply and recorded in a memorandum account. However, interest on classified loans and advances is accounted for on realization basis as per Bangladesh Bank circulars.

ii) Fees and commission income

Fees and commission income arising on services provided by the Bank are recognized at the time of realization. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.

iii) Investment income Income on investments is recognized on accrual basis. Capital gain/loss is recognized at the time of realization.

iv) Dividend income on shares Dividend income on shares is recognized when dividend is declared, ascertained and right to receive the payment is established.

2.2.5.9 Interest paid on deposits and borrowings

In terms of the provisions of the BAS 1: Presentation of the Financial Statements interest expenses are recognized on accrual basis.

2.2.5.10 Management and other expenses General and administrative expenses of the Bank are recognized on accrual basis.

2.2.6 General 2.2.6.1 Share capital

Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets. 2.2.6.2 Statutory reserve

As per Bank Companies Act, 1991 as amended, the Bank is required to transfer at least 20% of its current year profit before tax to the statutory reserve until such reserve equals to Paid up capital.

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2.2.6.3 Fixed assets revaluation reserve

When an asset’s carrying amount is increased as a result of a revaluation the increase amount should be credited directly to equity under the heading of revaluation surplus/reserve as per BAS 16: Property, Plant and Equipment . The Bank revalued the land which is absolutely owned by the Bank and the increased amount was transferred to revaluation reserve.

2.2.6.4 Non controlling interest

Non controlling interest is that portion of the profit or loss and net assets of the subsidiaries attributable to equity interests that are not owned, directly or indirectly by the Parent i.e. IFIC Bank Limited.

2.2.6.5 Reconciliation of books of account Books of account with regard to inter bank (in Bangladesh and outside Bangladesh) and inter branch transactions are reconciled and no material differences exist which may affect the financial statements significantly.

2.2.6.6 Earnings per share (EPS) Earning per share (EPS) is calculated in accordance with BAS 33: Earnings Per Share , which has been shown on the face of the profit and loss account.

i) Basic earnings per share This represents earnings for the period attributable to ordinary shareholders. As there was no preference shares, the net profit after tax for the period has been considered as fully attributable to the ordinary shareholders. This has been calculated by dividing the net profit after tax attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

ii) Weighted average number of ordinary shares outstanding

This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary share issued during the period multiplied by a time weighted factor. The time-waiting factor is the numbers of days the specific shares were outstanding as a proportion of the total number of days in the year.

iii) Diluted earnings per share

No diluted earnings per share is required to be calculated for the period as there was no dilutive potential ordinary share during the period.

2.2.6.7 Related party transactions

As per BAS 24: Related Party Disclosures parities are considered to be related if one of the parties has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. The Bank carried out transactions in the ordinary course of business on an arm's length basis at commercial rates with related parties.

Related party transaction is a transfer of resources, services, or obligations between related parties, regardless of whether a price is charged as per BAS 24: Related Party Disclosures , Bangladesh Bank and BSEC guidelines. Details of the related party transactions have been disclosed in Annexure F .

2.2.6.8 Events after the reporting period

All material event occurring after the reporting period has been considered and where necessary, adjusted for or adequately disclosed in the financial statements as per BAS 10 Events after the Reporting Period .

2.2.6.9 Operating segments

An operating segment is a component of the Bank that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Bank’s other components. All operating

segments’ operating results are reviewed regularly by the Bank’s Management (as being the chief operating decision maker) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Management include items directly attributable to a segment as well as the items that can be allocated on a reasonable basis. Segments which are reportable is analyzed at the end of the financial year.

The Bank has 8 (eight) operating segments at the end of the year 2015. Out of which only 5 (five) are reportable and hence segmental profit and loss for those segments have been disclosed. However since segmental assets and liabilities is not separately identifiable except for subsidiaries so that is not presented.

Details about segment reporting has been given at Annexure-I

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2.2.6.10 Risk management

The Risk of the Bank is defined as the probability of losses, financial or otherwise. The Risk Management of the Bank covers

core risk areas of banking viz. credit risk, foreign exchange risk , asset liability management risk, money laundering risk, internal

control & compliance risk and information & communication technology risk. Other risks like operational risk, liquidity risk, interest

rate risk, equity price risk, market risk are also managed on a regular basis. The prime objective of the risk management is that

the Bank takes better calculative business risks at the same time keeping safe the Bank’s capital, its financial resources and

profitability from various business risks through its own measures and through implementing Bangladesh Bank's guidelines and

following some of the best practices which is as under:

i) Credit risk Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms. The goal of the Bank Credit Risk Management is to maximize the bank's risk-adjusted rate of return by maintaining credit risk exposure within the acceptable parameters.

The Credit Risk Management works within the scope defined regulations and is in charge of specifying and implementing the

policies towards the effective functioning of the Bank's lending process and to develop the strategies for appropriate

management, measurement and monitoring its lending portfolio. Regular monitoring of the ability of borrowers to meet their

principal and interest repayment obligations is conducted. Credit risk is monitored by reference to risk grading and managed by

limiting the aggregate exposure to any individual counter party, group of companies or industry as per lending cap of the bank

and single borrower exposure limit defined by the Bangladesh Bank.

ii) Asset liability management risk

Asset Liability Management (ALM) is the most important aspect for the Bank to manage Balance Sheet Risk, especially for

managing of liquidity risk and interest rate risk. Changes in market liquidity and interest rate expose Bank business to the risk of

loss. Failure to identify the risks associated with business and to take timely measures against those risks may threaten the

survival of institution. As such, it is important that the senior management as well as the Board of Directors to understand the

existence of such risk on the Balance Sheet and ensure that the structure of the Bank business and the level of Balance Sheet

risks are effectively managed by adopting the appropriate policies, procedures to control these risks as well as resources

available for evaluating and controlling such risk. To address all the risk elements of the Balance Sheet, ALCO Meetings are

conducted at least on a monthly basis. ALM desk of the Bank analyses the Balance Sheet Risk and prepares the monthly ALCO

Papers as per the guidelines of Bangladesh Bank. The maturity gap of the assets-liabilities and interest rate movement are

strongly monitored by the ALCO. Moreover, ALCO of the Bank also monitor the optimum liquidity position of the Bank in line with

regulatory requirement. The Board approved policy guidelines on asset liability management has been formulated which is

reviewed time to time.

iii) Money laundering risk

Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. To mitigate this risk, since 2002 Bank has been complying with all the rules and regulations on AML/CFT issues. As directed by the Bangladesh Bank, the Bank has formulated “Guidelines on Prevention of Money Laundering” and “Policy for Combating Financing of Terrorism” which is strictly followed by the branches and officers of the Bank. In line with the noted policy and regulatory requirement, the Chief Anti-Money Laundering Compliance Officer (CAMLCO)

regularly submits status report to the competent authorities in respect of the Suspicious Transaction Report (STR), Cash

Transaction Report (CTR), Know Your Customer (KYC) Procedure, Transaction Monitoring Report, Structured Monitoring Report

as well as submits the half yearly Self Assessment Report of branches and independent testing procedures conducted by Internal

Control & Compliance Division and similar other areas. The Bank is consistently maintaining very good rating on AML/CFT

issues.

Bank is regularly arranging training programs on prevention of money laundering & combating financing of terrorism for its all executives & officers. During the period, the Bank arranged several training programs on prevention of money laundering & combating financing of terrorism where a number of executives & officers were participated.

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iv) Internal control and compliance risk

The operational performance of the Bank is depended on efficient and sound internal control system for establishing corporate

governance, transparency and accountability. In line with the Bangladesh Bank guidelines the Bank has successfully implemented the effective internal control system guidelines, formulation of policy guideline, set up of separate organizational structure, segregation of duties and introduction of internal control process, such as Departmental Control Function Checklist

(DECFL), Quarterly Operation Report (QOR), Monitoring of Staff Accounts, Ethics/Code of Conduct of the employees etc.

Being an integral part of daily activities of the Bank, Internal Control & Compliance Division consist three units namely;

Compliance, Monitoring and Audit & Inspection. These units are look after internal control, operational process very minutely to

ensure the smooth operation of the Bank. Compliance section is functioning to ensure compliance with statutory/regulatory

requirements and also Bank’s internal policies & procedures for developing compliance culture within the Bank. Monitoring unit

is responsible for operational performance of branches and head office to minimize and mitigate the risk factors associated with

the banking business. As a internal watchdog, the Audit and Inspection unit is conducting Risk Based Audit & Inspection to

identify, measure, control and mitigate risk factors at the branches and division of the Bank.

Internal Control Unit (ICU) has also been set-up at the branches with the existing manpower to minimize irregularities and lapses to prevent fraud, forgeries and to avoid operational risks of the Bank. In 2011 the Bank has introduced, Branch Audit Rating System in order to up grade the operational efficiency of the branches.

v) Fraud risk

Fraud is a concept that is generally understood but whose characteristics are often not recognized in due course. The incidence

of fraud may occur due to rapid changes in technological environment in the banking sector or intentional behavioural aspect of

the human being. Human fraudulent acts may be committed by outsiders or insider such as employees who are aware of the

internal operational process of the Bank. To take the advantage of the operational process and weakness of the internal control

system of the work place, employees may commit fraudulent activities within the Bank. To prevent the fraud and forgeries, the

Bank has adopted broad range of measures to monitor and mitigate the fraud risk which involves three steps, fraud prevention,

fraud detection and fraud investigation. Bank considers the best practice to prevent frauds and forgeries rather than to detect or

investigate. To prevent the external fraud, Bank regularly arrange training program for its executives and staffs working at branch

and head office level. Internal Control and Compliance unit of the Bank also works very extensively to ensure the effectiveness

of the internal control system throughout the Bank. Internal Control Unit (ICU) of each branch and division monitors the

transactions process to prevent and detect both internal and external frauds. During the period from 1 January to 30 June 2016

no fraud and forgeries has been identified.

vi) Foreign exchange risk

Foreign Exchange Risk arises from adverse movement in currency exchange rates. As per directives of Bangladesh Bank, the

Bank has formulated and adopted the treasury policy for managing the foreign exchange risks. Functions of the treasury front,

mid and back office have been designated and properly segregated. In addition to the policy guidelines treasury operational

guidelines have also been formulated for defining the roles and responsibilities of front, back and mid office so that various

foreign exchange transactions can be performed in line with the Bangladesh Bank regulations and Bank's internal policies and

procedures to measure, monitor and mitigate the foreign exchange risks. vii) Information and communication technology (ICT) risk

Technology and Banking Business has now been closely integrated. Since its inception, the Bank has adopted information and communication technology for its business to facilitate faster decision making and satisfaction of its customers.

Accordingly, the Bank has formulated policies and procedures for ICT Risk Management and has taken steps to protect the information and related assets from unauthorized access, modification and destruction for the sake of the interest of its customers. To mitigate risks in ICT operations, the Bank is continuously conducting training sessions on sensitive IT tasks (i.e. operational procedures, security procedures etc.) for relevant employees.

The Bank is taking Data Backup on daily basis; one copy is being stored in fire-proof Vault and another copy is being kept at remote site to face any disaster in Data Centre. Disaster Recovery (DR) Site has been established at Uttara, Dhaka to replicate data of Data Centre and failover business operations in case of any emergency or any disaster at Data Centre. Business continuity Plan has also been developed.

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The Bank Management has been putting conscious efforts to improve problem Management, ICT Operation Management, Change Management, Asset Management and Request Management to maintain maximum uptime of automated online banking business.

The Bank has updated ICT Policy Guideline in commensurate with guidelines of Bangladesh Bank. Physical security is being

maintained for its workplace to properly protect ICT resources as per the Physical Security Guideline under Tier-1 of ICT guideline of Bangladesh Bank. The Bank is strictly following the Information Security Guidelines of Bangladesh Bank which covers Password Control, User ID Maintenance, Input Control, Network Security, Data Encryption, Virus Protection and Access

Control to Internet and Emailing.

The Bank is maintaining Service Level Agreement (SLA) with the vendors who are directly involved for providing critical services on behalf of the Bank. The Bank is also maintaining Insurance Coverage of critical IT Assets and maintaining IT Assets Inventory.

The Bank has developed Fall Back Plan of IT Human Resources with detailed job descriptions and segregation of duties for IT tasks. The Bank has also completed all ICT Security documentation to ensure security of ICT Systems and is continuously updating them to strengthen security of the systems.

vii) Other relevant risks a) Operational risk

Operational risk addresses the risk associated with fraud, forgery, unauthorized activities, error, omission, system failure and

other external events. These occur mainly due to inadequate or failed internal processes, people and systems, or from external

events (including legal risk). The Bank is managing these risks through written procedures, regular training, awareness programs

and monitoring of the implementation of these procedures. Internal Control and Compliance Division of the Bank monitors

operational procedure of the Bank. It undertakes periodical and special audit of the branches and divisions at the Head Office

for review of the operation and compliance of statutory requirements. The Audit Committee of the Board subsequently reviews

the reports of the Internal Control and Compliance Division. b) Liquidity risk

Liquidity risk is the potential for loss to a bank arising from either its inability to meet its obligations as they fall due or to fund increases in assets as they required without incurring unacceptable cost or losses.

Liquidity risk arises when the cushion provided by the liquid assets are not sufficient enough to meet maturing obligations.

The objective of liquidity risk management is to ensure that all foreseeable funding and payments commitments and deposit

withdrawals can be met when due. To this end, the Bank is maintaining a diversified and stable funding base

comprising of retail and corporate deposits maintain balanced tenor and institutional balance. The liquidity management is

monitored by Asset Liability Committee (ALCO) on a regular basis. c) Market risk

It is the risk of potential losses in the on-balance sheet and off-balance sheet positions of a bank, steams from adverse movements in market rates or prices such as interest rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices.

Banks may be exposed to market risk in variety of ways. Market risk exposure- a) may be explicit in portfolios of securities/equities and instruments that are actively traded; b) may be implicit such as interest rate risk due to mismatch of assets and liabilities; and c) may arise from activities categorized as off-balance sheet items.

d) Interest rate risk Interest rate risk may arise from trading portfolio and non-trading portfolio. The trading portfolio of the Bank consists of government treasury bills, bond, etc. Interest rate risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset Liability Committee (ALCO) of the Bank monitors the interest rate movement on a regular basis.

Interest rate risk is the potential impact on a bank's earnings and net asset values due to changes in market interest rates.

Interest rate risk arises when a bank's principal and interest cash flows (including final maturities), both on-and off-balance sheet, have mismatched reprising dates. The amount at risk is a function of the magnitude and direction of interest rate changes and the size and maturity structure of the mismatch position. Bank's lending, funding and investment activities give rise to interest

rate risk. Interest rate risk management is conducted within the context of a comprehensive business plan.

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e) Equity price risk

Equity price risk is the risk of losses caused by changes in equity prices. These losses could arise because of changes in the value of listed shares held directly by the bank; changes in the value of listed shares held by a bank subsidiary; changes in the

value of listed shares used as collateral for loans from a bank or a bank subsidiary, whether or not the loan was made for the purpose of buying the shares; and changes in the value of unlisted shares. Bank presses vital importance to measure, monitor, and control their equity market risk.

f) Reputation risk

Reputation risk may arise from the possibility that negative publicity regarding the bank and its business practices, in the territory

or elsewhere through related entities, and whether accurate or not, will adversely impact the operations and position of the bank.

Reputation risk may also arise from an institution, or an affiliate, being domiciled in a jurisdiction where the legal and

organizational framework for the regulation and supervision of financial institutions is generally viewed as failing to meet

international standards for the protection of consumers of financial services and for the prevention of sheltering the proceeds of

organized crime.

The Bank manages the reputation risk ensuring the followings:

a) Management anticipates and responds to changes of a market or regulatory nature that affect its reputation in the market place;

b) The Bank effectively develops its polices for risk management to refrain from committing violations of laws, regulations, best banking practices, and consumer rights that could affect its reputation; c) The Bank has continuous awareness that it is not subject to significant litigation, large monetary losses, or a high volume of customer complaints; d) The bank is routinely seen in a leadership role in community development and corporate social responsibility; and e) Management has a clear awareness of privacy issues and uses customer information responsibly.

2.2.6.11 Management Committee (MANCOM)

The Management Committee (MANCOM) is functioning since the year 1994 as a structured unit to take important management

decisions. Presently, it comprises members holding key positions in the management of the Bank. The Committee is headed by

the Managing Director who is assisted by a Senior Management Group consisting of the Deputy Managing Directors, Heads of

Division of strategically important divisions along with Branch Managers of large and important branches. Managing Director’s

Secretariat also acts as the member secretary to the Committee. The members of the Committee, having long experience in commercial banking actives, are concerned with management of respective Division as

well as monitoring day to day activities taking place in different areas of the Bank.

The Committee sits at least once in every month to review and evaluate strategic operational issues of the bank, identify specific problems which need to be immediately attended, identify position of weakness (if any) of the Bank and take remedial measures or any other measures for enhancing general image of the Bank. Generally, the MANCOM is concerned with major decision making, planning and framing of policy guidelines in the Bank.

2.2.6.12 Credit rating of the bank

The Bank has been awarded its credit rating done by Credit Rating Agency of Bangladesh Limited (CRAB) based on the financial statements and other relevant information as at and for the year ended 31 December 2015 as per BRPD Circular no. 6 dated 5 July 2006. The following ratings for different year have been awarded:

Type of Period of Financial statements used as basis

Rating Status

Validity

Rating Long term Short term Outlook

Entity January to December 2015 AA2 ST-2 Stable 30-Jun-17

Entity January to December 2014 AA2 ST-2 Positive 30-Jun-16




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2.2.6.13 Compliance report on Bangladesh Financial Reporting Standards (BFRSs): The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption of Bangladesh Financial Reporting Standards (BFRSs) including Bangladesh Accounting Standards (BASs). While preparing the financial statements, Bank complied all the applicable BASs and BFRSs as adopted by ICAB except those described in note 2.1.1. Details are given

Name of the BFRS BFRS No. Status

First time Adoption 1 N/A

Share Based Payment 2 N/A

Business Combinations 3 Complied

Insurance Contracts 4 N/A

Non- current Assets Held for Sale and Discontinued Operations 5 N/A

Exploration for and Evaluation of Mineral Resource 6 N/A

Financial Instruments: Disclosures 7 Complied

Operating Segments 8 Complied

Consolidated Financial Statements 10 Complied

Joint Arrangements 11 Complied

Disclosure of Interests in Other Entities 12 Complied

Fair Value Measurement 13 Complied

Note: N/A - Not Applicable

Name of the BAS BAS No. Status

Presentation of Financial Statements 1 Complied*

Inventories 2 Complied

Statement of Cash Flows 7 Complied

Accounting Policies, Changes in Accounting estimates & Errors 8 Complied

Events after the Reporting Period 10 Complied

Construction Contracts 11 N/A

Income Taxes 12 Complied

Property, Plant and Equipment 16 Complied

Leases 17 Complied

Revenue 18 Complied

Employee Benefits 19 Complied

Accounting for Government Grants and Disclosure of Government Assistance 20 N/A

The effects of changes in Foreign Exchange Rates 21 Complied

Borrowing Costs 23 Complied

Related Party Disclosure 24 Complied

Accounting and Reporting by Retirement Benefits Plans 26 N/A**

Separate Financial Statements 27 Complied

Investment in Associates and Joint Ventures 28 Complied

Financial Instruments: Presentation 32 Complied*

Earnings per share 33 Complied

Interim Financial Reporting 34 Complied

Impairment of Assets 36 Complied

Provisions, Contingent Liabilities and Contingent Assets 37 Complied

Intangible Assets 38 Complied

Financial Instruments: Recognition and Measurement 39 Complied*

Investment Property 40 N/A

Agriculture 41 N/A

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* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are different to BAS/BFRS, some of the requirements specified in these BAS/BFRSs are not applied. ** This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the plan. Therefore, it is not applicable for the Bank’s annual report as it is the employer and not the retirement benefit plan itself. The following BFRSs were issued but not effective as at 30 June 2016

Name of the BFRS BFRS No. Effective From

Financial Instruments BFRS 9 On or after 01.01.2018

Revenue form Contracts with Customers BFRS 15 On or after 01.01.2018

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Notes to the Financial Statements as at and for the half year ended 30 June 2016

Amount in BDT Note 30 June 2016 31 December 2015

3 Cash

Cash in hand (including foreign currency) 3.1 1,640,659,380 1,626,141,729 Balance with Bangladesh Bank and its agent bank(s) (including 3.2 12,079,222,425 10,235,213,906 foreign currency)

13,719,881,805 11,861,355,635

3.1 Cash in hand (including foreign currency)

Local currency in hand 1,459,996,830 1,487,148,722 Foreign currencies in hand 23,997,939 21,543,772

Cash with ATM 156,664,611 117,449,235

1,640,659,380 1,626,141,729

3.2 Balance with Bangladesh Bank and its agents bank

Bangladesh Bank

Local currency 10,456,574,517 8,953,855,327

Foreign currency 1,328,206,756 884,451,807

11,784,781,273 9,838,307,134 Sonali Bank as agent of Bangladesh Bank 294,441,152 396,906,772

12,079,222,425 10,235,213,906 3.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with section 33 of Bank Companies Act 1991 as amended and MPD circular no. 1, dated 23 June 2014 and MPD circular no. 2, dated 10 December 2013.

3.3.1 Cash Reserve Requirement (CRR)

As per Bangladesh Bank MPD Circular no. 1 dated 23 June 2014 [effective from 24 June 2014], all scheduled banks have to maintain CRR of minimum 6.0% on daily basis and 6.5% on bi-weekly basis based on weekly average demand and time liabilities excluding inter-bank deposits of immediate preceding two months [i.e. CRR of June 2016 was based on weekly average balance of April 2016]. CRR maintained by the Bank as per statutory requirement is shown below:

Average time and demand liabilities 147,609,463,300 139,513,656,200

Required reserve 8,856,567,798 8,370,819,372 Actual reserve maintained* 10,448,639,000 8,978,550,000

Surplus 1,592,071,202 607,730,628

* As per Bangladesh Bank statement. 3.3.2 Statutory Liquidity Ratio (SLR)

As per Bangladesh Bank MPD Circular no. 2 dated 10 December 2013 [effective from 1 February 2014], all scheduled banks have to maintain SLR of minimum 13.0% of weekly average demand and time liabilities excluding inter-bank deposits of immediate preceding two months [i.e. SLR of June 2016 was based on weekly average balance of April 2016]. SLR maintained by the Bank as per statutory requirement is shown below:

Average time and demand liabilities 147,609,463,300 139,513,656,200

Required reserve 19,189,230,229 18,136,775,306

Actual reserve maintained 23,424,965,160 26,219,916,781 Surplus 4,235,734,931 8,083,141,475 Actual reserve maintained for SLR

Cash in hand 3.1 1,640,659,380 1,626,141,729 Balance with Bangladesh Bank in excess of CRR 3.3.1 1,592,071,202 607,730,628 Balance with Sonali Bank as agent 3.2 294,441,152 396,906,772 Government securities (HFT) 6.3 6,433,201,060 10,199,931,664 Government securities (HTM) 6.3 13,459,592,366 13,384,205,988 Other approved securities 6.1.3 5,000,000 5,000,000 23,424,965,160 26,219,916,781

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3.a Consolidated cash in hand

IFIC Bank Limited 3.1 1,640,659,380 1,626,141,729

IFIC Securities Limited 44,441 30,095

IFIC Money Transfer (UK) Limited 18,381,203 22,555,143 1,659,085,024 1,648,726,967

3.b Balance with Bangladesh Bank and its agents bank IFIC Bank Limited 3.2 12,079,222,425 10,235,213,906

IFIC Securities Limited - - IFIC Money Transfer (UK) Limited - -

12,079,222,425 10,235,213,906

13,738,307,449 11,883,940,873

4 Balance with other banks and financial institutions In Bangladesh 4.1 8,351,492,804 3,827,088,363

Outside Bangladesh 4.2 2,329,245,934 1,883,456,854 10,680,738,738 5,710,545,217

4.1 In Bangladesh In current deposit account with

Agrani Bank Ltd. 42,028,728 50,030,513

Sonali Bank Ltd. 5,590,216 19,040,228 47,618,944 69,070,741

In special notice deposit account with Trust Bank Ltd 72,249,327 28,775,384

Standard Chartered Bank 72,133,006 27,773,811 144,382,333 56,549,195

In beneficiary owner (BO) account with IFIC Securities Ltd. 9,461,293 1,438,193 Latif Securities 30,234 30,234 9,491,527 1,468,427

In fixed deposit account with banks and NBFIs Peoples Leasing & Financial Services Ltd. 150,000,000 150,000,000

The City Bank Ltd. 1,450,000,000 -

Industrial and Infrastructure Development Finance Company Ltd. 150,000,000 150,000,000

Investment Corporation of Bangladesh(ICB) 3,700,000,000 3,000,000,000

Bangladesh Finance and Investment Co. Ltd - 400,000,000

Jamuna Bank Ltd. 1,200,000,000 -

National Bank Ltd. 1,500,000,000 -

8,150,000,000 3,700,000,000

8,351,492,804 3,827,088,363

4.2 Outside Bangladesh (NOSTRO Accounts)

Current account J.P. Morgan Chase Bank, New York 242,892,167 183,250,044

Citi Bank N.A. New York 350,037,375 183,315,158

HSBC Bank , New York - 502,360,634

Standard Chartered Bank, London 12,002,892 12,443,300

Masreq Bank PSC, New York 164,170,786 289,213,990

Mashreq Bank, PSC, Mumbai, India 9,065,465 29,058,358

Standard Chartered Bank, New York 956,525,046 57,683,398

Wells Fargo Bank, New York 85,199,078 158,144,711

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Sonali Bank, (UK) Limited 39,957,261 13,735,464

Standard Chartered Bank, Kolkata 50,844,880 46,497,271

AB Bank Ltd., Mumbai 65,941,562 81,889,537

NIB Bank Ltd, Karachi, Pakistan 38,712,494 31,333,264

National Trust Bank Ltd., Colombo 335,021 166,393

Nepal Bangladesh Bank Ltd., Kathmandu, Nepal 12,190,483 11,687,054

Sonali Bank, Kolkata 13,910,114 15,780,281

State Bank of India, Kolkata - 4,835,459

Bank of Bhutan, Phuentosoling 319,531 84,439

ICIC Bank Ltd.,Kalkata 63,842,534 62,877,204

Commerz Bank AG, Frankfurt 107,218,659 67,913,524

Habib American Bank, New York 48,150,692 68,429,084

J.P. Morgan Chase Bank, Sydney 3,995,888 4,011,554

Habib Bank AG , Zurich (51,381) 388,242

Commerz Bank AG,Frankfurt 8,851,588 30,390,907 J.P. Morgan Chase Bank AG, Frankfurt 4,523,671 5,731,476 Sonali Bank UK London 795,374 782,575 Standard Chartered Bank,London 46,085,355 9,292,099 Sonali Bank(UK)Limited 1,556,447 6,210,353 Bank of Tokyo- Mitsubishi,Tokyo 1,033,122 143,907 AB Bank Ltd.,Mumbai 866,156 5,807,175 Habib Bank UK, London 273,675 -

2,329,245,934 1,883,456,854 For details of foreign currency amounts and rates thereof please see "Annexure-A"

4.3 Maturity grouping of balance with other banks and FIs

Receivable on demand 2,521,247,211 2,010,545,217

Upto 1 month 4,150,000,000 2,000,000,000

More than 1 month but not more than 3 months 3,850,000,000 1,150,000,000

More than 3 months but not more than 6 months 159,491,527 550,000,000 More than 6 months but not more than 1 year - - More than 1 year but not more than 5 years - - More than 5 years - -

10,680,738,738 5,710,545,217

4.a Consolidated balance with other banks and financial institutions 4.a(i) In Bangladesh


IFIC Securities Limited 79,819,767 6,434,716

IFIC Money Transfer (UK) Limited - - 8,431,312,571 3,833,523,079 Less: Inter -company transaction 79,819,766 6,434,715 8,351,492,805 3,827,088,364

4.a(ii) Outside Bangladesh IFIC Bank Limited 4.2 2,329,245,934 1,883,456,854 IFIC Securities Limited - -

IFIC Money Transfer (UK) Limited 15,678,342 6,503,084

2,344,924,276 1,889,959,938 Less: Inter -company transaction - -

2,344,924,276 1,889,959,938

10,696,417,081 5,717,048,302

Page | 74


5 Money at call and on short notice

Banking companies

BRAC Bank Ltd. 210,000,000 -

National Bank Ltd. 200,000,000 -

Pubali Bank Ltd. 100,000,000 -

Modhumoti Bank Ltd. 90,000,000 - 600,000,000 -

6 Investments Government Securities 6.1 19,902,907,126 23,596,892,752

Other Investments 6.2 4,745,579,077 4,900,964,126 24,648,486,203 28,497,856,878

6.1 Government securities Treasury bills 6.1.1 4,635,364,539 10,204,931,663

Treasury bonds 6.1.2 13,459,592,367 13,379,205,989

Bangladesh Bank bills 1,797,836,520 -

Prize bond 5,113,700 7,755,100

Debentures 6.1.3 5,000,000 5,000,000 19,902,907,126 23,596,892,752

6.1.1 Treasury bills 91 days treasury bills 1,897,697,289 4,307,601,783

182 days treasury bills 593,036,870 3,514,563,540

364 days treasury bills 2,144,630,380 2,382,766,340 4,635,364,539 10,204,931,663

6.1.2 Treasury bonds 2 years Treasury bond 1,219,230,155 1,073,474,828

5 years Treasury bond 1,633,110,420 1,291,919,220



20 years Treasury bond 1,465,433,132 1,465,433,132 13,459,592,367 13,379,205,989

6.1.3 Debentures House Building Finance Corporation 5,000,000 5,000,000

5,000,000 5,000,000

6.2 Other investments Unquoted shares

Karma Sangsthan Bank 20,000,000 20,000,000

Central Depository Bangladesh Ltd. 22,847,220 22,847,220

Energy Pack Power Company Ltd. 25,960,000 25,960,000 68,807,220 68,807,220

Quoted shares

National Housing Finance & Investment Ltd. 39,010,000 39,010,000

Power Grid Company Ltd. 275,412,488 275,412,488

Delta Life Insurance Company Ltd. 83,187,944 83,187,944

Khulna Power Company Ltd. - 4,467,884

Summit Power Ltd. 108,786,696 108,786,696

Summit Alliance Port Ltd. 28,198,825 27,546,745 British American Tobacco Bangladesh Ltd. 91,555,568 91,555,568

Eastland Insurance Company Ltd. 8,941,428 8,941,428

Page | 75


TITAS Gas Transmission and Distribution Ltd. 465,701,734 465,701,734

Beximco Ltd. 1,264,121,634 1,264,121,634

Malek Spinning Mills Company Ltd. 7,681 7,681

Unique Hotel and Resorts Ltd. 21,029,385 21,029,385

The City Bank Ltd. 194,197,477 194,197,477

MJL Bangladesh Ltd. 8,578,577 45,291,198

Fareast Life Insurance Ltd. 136,631,812 136,631,812

Beximco Pharmaceuticals Ltd. 24,619,620 137,938,967

Northern General Insurance Company Ltd. 10,951,563 10,951,563

Reliance Insurance Ltd. 11,674,463 11,674,463 2,772,606,895 2,926,454,667

Mutual funds

IFIC Bank 1st Mutual Fund 250,000,000 250,000,000

ICB Employee 1st Mutual Fund 17,986,473 17,986,473

267,986,473 267,986,473

Outside Bangladesh Nepal Bangladesh Bank Ltd. 1,285,345,324 1,286,433,768

Oman International Exchange LLC 17,820,477 17,843,275

NIB Bank Ltd., Pakistan 333,012,688 333,438,723

1,636,178,489 1,637,715,766

4,745,579,077 4,900,964,126

For details of of investment in shares please see "Annexure-B"

6.3 Government securities classified according to Bangladesh Bank Circular Held for trading (HFT) 6,433,201,060 10,199,931,664 Held to maturity (HTM) 13,459,592,366 13,384,205,988 Other securities 10,113,700 12,755,100

19,902,907,126 23,596,892,752

6.4 Maturity grouping of investments On demand 5,113,700 7,755,100 Up to 1 month 3,033,144,701 2,107,865,071 Over 1 month but not more than 3 months 4,059,336,445 5,104,777,625 Over 3 months but not more than 6 months 223,439,566 1,830,018,863 Over 6 moths but not more than 1 years 1,150,350,231 1,913,870,143

Over 1 year but not more than 5 years 8,367,386,949 9,753,794,807

Over 5 years 7,809,714,611 7,779,775,269

24,648,486,203 28,497,856,878

6.5 Disclosure regarding outstanding Repo and Reverse Repo

Sl.

Counterparty Name Agreement date Reversal date Amount

- - - - -

Total

Disclosure regarding outstanding Reverse Repo

Sl. Counterparty Name Agreement date Reversal date Amount

- - - - -

Total -

Page | 76


Disclosure regarding Overall transaction of Repo and Reverse Repo

Counterparty Name Minimum outstanding in HY2016

Maximum outstanding in Daily average outstanding

HY2016 in HY2016

Securities sold under Repo

With Bangladesh Bank - - -

With other Banks and FIs 172,600,000 1,568,000,000 70,400,000

Securities purchased under Reverse Repo From Bangladesh Bank - - -

From other Banks and FIs 209,200,000 760,500,000 44,700,000

6.a Consolidated investments

Government Securities

IFIC Bank Limited 6.1 19,902,907,126 23,596,892,752 IFIC Securities Limited - - IFIC Money Transfer (UK) Limited - -

19,902,907,126 23,596,892,752

6.b Consolidated other investments

IFIC Bank Limited 6.2 4,745,579,077 4,900,964,126 IFIC Securities Limited 89,003,312 89,321,750 IFIC Money Transfer (UK) Limited - - Less:

Book value of investment in joint venture/associate-NBBL (1,285,345,324) (1,286,433,768) Book value of investment in joint venture/associate -OIE LLC (17,820,477) (17,843,275) Add:

Investment in NBBL under equity method 41.b(i) 1,893,093,347 1,744,628,767 Investment in OIE LLC under equity method 41.b(ii) 87,526,737 86,223,917

5,512,036,672 5,516,861,518 25,414,943,798 29,113,754,270

7 Loans and advances

Loans, cash credit, overdraft etc. 7.1 120,396,102,483 114,236,126,152

Bill purchased and discounted 8 8,960,462,953 9,032,541,721 129,356,565,436 123,268,667,873

7.1 Loans, cash credit, overdraft etc. Inside Bangladesh

Term loan industrial 12,518,919,924 11,011,276,371 Term loan consumer finance 615,085,856 590,143,861 Agricultural loan 2,105,247,817 2,002,885,416 Term loan women entrepreneur 10,285,461 8,416,725 Term loan-others 29,273,387,666 27,005,371,690 House building loans 9,240,973,551 5,539,524,968 Staff loan 1,939,876,787 1,957,587,284 Transport loan 746,750,308 801,367,255 Loan general 2,312,920,125 2,637,343,293 Demand loan 3,184,872,787 2,711,519,557 Overdrafts 25,108,184,879 25,220,065,470 Cash credit 27,018,106,172 27,282,256,826

Credit card finance 240,533,517 252,438,131

Loan against imported merchandise(LIM) 65,696,811 71,170,218

Loan against trust receipt (LTR) 4,807,724,678 5,877,060,897

Lease Finance 7.16 551,248,225 524,324,497 119,739,814,564 113,492,752,459 Outside Bangladesh - -

119,739,814,564 113,492,752,459 Off-shore banking unit 656,287,919 743,373,693

120,396,102,483 114,236,126,152

Page | 77


7.2 Residual maturity grouping of Loans, cash credit, overdraft etc. Receivable

On demand - 3,830,157,011 Up to 1 month 23,939,063,428 23,172,649,927

Over 1 month but not more than 3 months 20,275,607,877 20,546,137,290

Over 3 moths but not more than 1 years 36,624,136,590 32,541,033,969


Over 5 years 13,956,520,633 9,345,011,032

120,396,102,483 114,236,126,152

7.3 Loans and advances under broad categories In Bangladesh

Loans 68,269,811,432 61,733,803,856

Cash credit 27,018,106,172 27,282,256,826

Overdrafts 25,108,184,879 25,220,065,470 120,396,102,483 114,236,126,152

Bill purchased and discounted 8 8,960,462,953 9,032,541,721

129,356,565,436 123,268,667,873

Outside Bangladesh - -

129,356,565,436 123,268,667,873

7.4 Loans and advances on the basis of significant concentration Loans and advances to Directors, executives and others

Loans and advances to directors and their allied concerns - -

Loans and advances to Managing Director, Senior Executives and Staffs 1,939,876,787 1,957,587,284

Advances to customers' groups 127,416,688,649 121,311,080,589

129,356,565,436 123,268,667,873

7.5 Loans and advances allowed to each customer exceeding 10% of Bank's total capital Number of customers 24 29

Amount of outstanding loans - funded & non-funded 56,092,200,000 60,163,200,000

Amount classified - -

Amount of loans and advances (comprising funded and non funded facilities) to each customer exceeding BDT 1,582.41

million which is computed as 10% of the Bank's capital (as defined under Bank Companies Act 1991 as amended) of Tk

15,824.14 million as at 30 June 2016. As at 31 December 2015, 10% of Bank's total capital of BDT 11,813.12 million was

BDT 1,181.31 million. For details of loans and advances to each customer exceeding 10% Banks capital please see "Annexure-C".

7.6 Industry wise position of loans and advances including bills purchased and discounted

Agriculture Industries 2,105,247,817 2,002,885,416 Jute Industries 1,880,680,525 1,296,298,222 Textile Industries 6,556,152,101 8,118,842,232 Garments Industries 19,836,331,335 18,336,362,179 Chemical and Chemical Products 372,239,262 372,239,262 Cement Industries 238,764,504 367,851,556 Bricks & Ceramic 928,076,185 887,340,215 Food Products & Processing 1,154,699,565 1,228,055,714 Engineering & Metal 4,370,629,591 5,593,862,778 Drugs & Pharmaceuticals 790,106,357 934,861,390 Hospital & Clinics 132,548,948 125,355,045 Paper & Paper Products Industries 162,200,586 296,104,544 Other Small Industries 10,540,309,891 11,498,323,363 IT Sector 2,687,342,273 3,242,999,001 Other Service Industries 10,316,521,692 4,890,000,000 Trade & Commerce 29,671,376,965 26,272,748,741

Page | 78

Amount in BDT Note 30 June 2016 31 December 2015 IFIC Securities Ltd. 1,263,637,914 1,295,383,172 Transport 355,816,679 895,567,615 Construction Firms/Companies 4,460,603,449 4,546,534,800 Housing Societies/Companies 8,438,433,563 9,908,212,895 Cold Storage 81,780,741 89,280,741 Non-Banking Financial Institutions - 700,045,944 Consumer Finance 8,727,284,956 6,238,511,093 Energy 6,051,021,983 4,972,747,360 Telecommunication 5,556,998,503 5,525,088,366 Others 2,677,760,054 3,633,166,227

129,356,565,436 123,268,667,873

7.7 Sector wise position of loans and advances including bills purchased and discounted Government sector - - Other public sector 251,000,000 591,971,117 Private sector 129,105,565,436 122,676,696,756 Co-operative sector - - 129,356,565,436 123,268,667,873

7.8 Geographical location-wise loans and advances including bills purchased and discounted Inside Bangladesh

Dhaka division 100,352,915,440 95,187,256,664

Chittagong division 15,271,081,717 16,068,894,624

Sylhet division 1,109,249,257 883,817,564

Rajshahi division 5,982,406,397 5,369,258,853

Khulna division 3,322,637,294 2,930,916,862

Barisal division 617,886,417 463,872,866

Rangpur division 2,700,388,914 2,364,650,440

129,356,565,436 123,268,667,873

Outside Bangladesh - - 129,356,565,436 123,268,667,873

7.9 Business segment-wise concentration of loans and advances as per CL

Corporate 84,524,950,069 88,764,434,503

SME 27,250,002,395 20,741,562,729

Short term agri credit 2,529,792,809 2,213,281,743

Consumer (including staff) 5,566,186,998 5,413,427,738

Others 9,485,633,165 6,135,961,160

129,356,565,436 123,268,667,873

7.10 Loans and advances including bills purchased and discounted as per CL Inside Bangladesh Continuous loan

Consumer finance 2,381,895,492 2,278,438,642 Small and medium enterprise 21,102,477,225 17,525,982,325 Loans to BHs/MBs/SDs 2,181,121,827 2,207,827,731

Other continuous loans 24,974,181,375 29,307,054,916

50,639,675,919 51,319,303,614

Demand loans Consumer finance 498,685,614 483,833,803

Small and medium enterprise 2,593,184,705 1,600,480,409 Loans to BHs/MBs/SDs - -

Other continuous loans 19,019,058,974 20,462,459,126

22,110,929,293 22,546,773,338

Short term loan

Short term agri credit 2,529,792,809 2,213,281,743

Page | 79


Term loan

Consumer finance (including staff, other than HF) 2,685,605,892 2,651,155,293

Small and medium enterprise 3,554,340,465 1,615,099,995

Housing finance (HF) 7,302,276,886 3,925,919,657

Loans for professionals 2,234,452 2,213,772

Loans to BHs/MBs/SDs - -

Other fixed term loan 40,531,709,720 38,994,920,461

54,076,167,415 47,189,309,178

Outside Bangladesh - -

129,356,565,436 123,268,667,873

7.11 Security/collateral-wise concentration of loans and advances including bills purchased and discounted

Collateral of movable/immovable assets 89,025,787,428 65,256,639,311

Local banks and financial institutions' guarantee - -

Government guarantee - -

Foreign bank guarantee - -

Export documents 3,950,786,308 3,850,631,263

Fixed deposit receipts 9,817,935,109 8,811,513,496

Government bonds - -

Personal guarantee 8,948,174,836 12,067,127,042

Other securities 17,613,881,756 33,282,756,761

129,356,565,436 123,268,667,873

7.12 Particulars of loans and advances i) Loans considered good in respect of which the Bank is fully secured. 113,126,215,682 108,090,979,501

ii) Loans considered good for which the Bank holds no other security than 9,948,174,836 10,170,470,841

the debtors' personal guarantee.

iii) Loans considered good being secured by personal security of one or 6,282,174,918 5,007,217,531

more persons in addition to the personal security of the debtors.

iv) Loans adversely classified; provision not maintained there against. - -

129,356,565,436 123,268,667,873

v) Loans due by directors or officers of the banking company or any of these either

separately or jointly with any other persons. vi) Loans due from companies or firms in which the directors of the banking

company have interests as directors, partners or managing agents or in case of private companies as members;

vii) Maximum total amount of advances, including temporary advances made at any

time during the period/year to directors or employees of the Bank or any of them either severally or jointly with any other person

viii) Maximum total amount of advances, including temporary advances granted

during the period/year to the companies or firms in which the directors of the Bank are interested as directors, partners or managing agents or in the case of private companies as members

1,939,876,787 1,957,587,284

1,263,766,052 1,295,368,172

1,939,876,787 2,073,804,566

1,263,766,052 1,295,368,172

ix) Due from banking companies - - x) a) Classified loans for which interest has not been charged:

Increase/(decrease) in specific provision 340,113,339 523,923,354

Amount of loan written off - 1,224,042,403

Amount recovered against the loans previously written off 97,612,716 102,050,000

Page | 80


b) Amount of provision kept against loans classified as bad/loss as 2,616,063,214 2,275,949,875 at the Balance Sheet date

c) Amount of interest creditable to the interest suspense account 1,117,669,148 1,962,382,331

xi) Cumulative amount of written off loan:

Opening balance 8,805,293,785 7,681,387,382

Amount written off during the period/year - 1,224,042,403 Interest charged 944,000 1,914,000

Recovery from written-off during the period/year* (97,612,716) (102,050,000) 8,708,625,069 8,805,293,785

* Recovery from written-off loans during the period/year include waiver of BDT 9,524,000 [Y2015: BDT 10,071,613].

7.13 Cumulative amount of written off loans for which law suits have been filed Opening balance 13,628,593,146 12,404,550,743

During the period/year - 1,224,042,403

13,628,593,146 13,628,593,146

Out of this cumulative amount of written-off loans, no suit could be filed for recovery of BDT 43.8 million for becoming time barred.

7.14 Classification of loans and advances

Unclassified

Standard 108,018,302,696 105,456,769,377

Special mention account 11,196,654,559 9,849,846,666

119,214,957,255 115,306,616,044

Classified

Substandard 1,723,596,092 1,208,861,621 Doubtful 2,077,511,632 1,282,352,831

Bad/Loss 6,340,500,457 5,470,837,378

10,141,608,181 7,962,051,830

129,356,565,436 123,268,667,873

7.15 Movements of classified loans and advances

Opening balance 7,962,051,830 5,061,133,652

Additions during the period/year 3,973,290,000 8,190,736,565

Reduction during the period/year (1,793,733,649) (5,289,818,388)

10,141,608,181 7,962,051,830

7.16 Net lease receivable

Gross lease receivable within 1 year 157,422,805 153,006,637

Gross lease receivable 1 - 5 years 582,369,770 566,032,601

Total lease rental receivable 739,792,576 719,039,238

Less: Unearned income 188,544,351 194,714,741

Net lease receivable 551,248,225 524,324,497 The net lease receivable is shown under the head of loans, cash credit, overdraft etc.

7.a Consolidated loans and advance Loans, cash credits, overdrafts etc.


IFIC Securities Limited 3,906,202,585 3,694,754,938

IFIC Money Transfer (UK) Limited - -

124,302,305,068 117,930,881,090

Less: Inter-company transactions 1,263,766,052 1,295,383,173

123,038,539,016 116,635,497,917

Page | 81


8 Bills purchased and discounted

Payable in Bangladesh 8,021,026,663 8,546,663,593

Payable outside Bangladesh 939,436,290 485,878,128 8,960,462,953 9,032,541,721

8.1 Bill purchased and discounted Payable in Bangladesh Local bills/documents

Inland documentary bill purchase (IDBP) 1,249,936,395 1,390,912,895 Payment against documents-cash 289,722,647 355,359,394 Payment against documents-EDF 5,253,399,041 4,778,404,158

Payment against documents-forced (Inland) 202,937,307 164,320,231

Payment against documents-forced (Foreign) 143,923,684 382,748,266

Payment against documents-Others 23,768,709 321,636,140

7,163,687,783 7,393,381,084 Off-shore banking unit 857,338,880 1,153,282,509

8,021,026,663 8,546,663,593

Payable outside Bangladesh

Foreign bills/documents

Foreign documentary bill purchase (FDBP) 939,436,290 485,878,128

939,436,290 485,878,128

8,960,462,953 9,032,541,721 8.2 Residual maturity grouping of bill purchased and discounted

Receivable On demand 1,168,670,088 1,424,916,039 Up to 1 month 2,443,364,029 2,370,666,051 Over 1 month but not more than 3 months 3,036,606,130 2,979,636,791 Over 3 moths but not more than 6 months 2,290,251,242 2,234,989,719

Over 6 months 21,571,464 22,333,121

8,960,462,953 9,032,541,721

8.a Consolidated bills purchased and discounted

IFIC Bank Limited 8 8,960,462,953 9,032,541,721 IFIC Securities Limited - - IFIC Money Transfer (UK) Limited - -

8,960,462,953 9,032,541,721 9 Fixed assets including premises, furniture and fixtures

Cost/revalued: Land 475,118,759 475,118,759 Buildings and premises 1,337,951,477 1,337,951,477 Wooden furniture 121,374,186 118,694,149 Steel furniture 61,872,895 59,242,462 Computer equipment 709,773,095 668,481,187 Office equipment 202,737,786 196,964,697 Electrical & gas equipment 416,415,019 394,944,685 Leasehold improvement 253,816,300 237,653,741 Vehicles 115,613,145 115,673,145 Leased vehicles 47,600,000 47,600,000 Soft furnishing 12,203,383 12,653,637

Intangible assets: 3,754,476,045 3,664,977,939

Software 295,567,722 293,931,990 4,050,043,767 3,958,909,929 Capital work in progress * 1,196,085,840 846,594,774 5,246,129,608 4,805,504,702 Less: Accumulated depreciation 1,679,429,405 1,575,137,777

Written down value 3,566,700,203 3,230,366,926

Page | 82

Amount in BDT

Note 30 June 2016 31 December 2015

For details of fixed assets please see "Annexure-D"

* Capital work in progress represents the amount paid for procuring material & equipment for under constructed IFIC Bank Tower and upgradation of core banking software-MISYS.

9.a Consolidated fixed assets including premises, furniture and fixtures

IFIC Bank Limited 9 3,566,700,203 3,230,366,926



3,578,965,574 3,244,881,023

10 Other assets Stationery and stamps 25,706,892 23,880,960

Suspense account 10.1 506,727,104 472,775,672

Advance, deposit and prepayments 10.2 2,912,080,073 2,217,402,880

Accrued interest on investment & other income receivable 10.3 968,019,361 848,795,327

Investment in subsidiaries 10.4 831,571,940 834,879,920

Revaluation account FDBP 1,792,520 1,792,520

Deferred tax assets 10.5 1,081,670,632 841,302,473

Accounts receivable others 8,617,760 5,123,046

6,336,186,282 5,245,952,798

Off-shore banking unit 71,566,220 145,731,263

6,407,752,502 5,391,684,061

10.1 Suspense account Sundry debtors 136,721,982 134,948,472

Advance against bills, new branches 15,376,060 32,501,733

Advance against TA / DA 1,397,340 1,095,990

Law charges 145,795,033 130,206,562

Sanchayapatra paid 147,811,009 131,687,663

Wage earners development bond paid 27,528,369 6,992,551

CIB charge recovery 855,444 92,904

Moneygram services 30,462,989 34,685,105

Others 633,190 564,692

506,727,104 472,775,672

10.2 Advance, deposit and prepayments Advance rent 292,176,202 317,008,488

Advance income tax 2,265,368,517 1,578,711,636

Security deposit including demand note 11,846,191 6,277,571

Advance against car purchase 207,434,464 228,842,260

Advance against insurance premium 3,166,678 501,307

Protested bills 22,200,650 22,121,026

Cash remittance 34,000,000 12,500,000

Others 75,887,371 51,440,592

2,912,080,073 2,217,402,880

10.3 Accrued interest on investment & other income receivable Treasury bonds 452,577,881 444,497,079 Debentures and bonds 3,354,562 3,210,562 Receivables from Government 41,272,375 41,272,375 Interest accrued on loans and advances 264,592,664 88,330,394 Investment on FDR 63,496,042 73,700,526

Others 142,725,837 197,784,391

968,019,361 848,795,327

Page | 83


10.4 Investment in subsidiaries


IFIC Money Transfer (UK) Limited 31,577,940 34,885,920 831,571,940 834,879,920

10.5 Deferred tax assets

Deferred tax assets have been recognized and measured as per Bangladesh Accounting Standards-12: Income Taxes and BRPD Circular no. 11 dated 12 December 2011 based on temporary difference in the carrying amount of the assets and liabilities in the financial statements and its tax base. Calculation of deferred tax assets is as follows:

Deferred tax assets 1,263,244,772 1,041,964,428

Deferred tax liabilities (181,574,140) (200,661,955) Deferred tax assets/(liabilities) 1,081,670,632 841,302,473

i) Deferred tax on provision for loans and advances classified as doubtful and bad & loss Carrying amount 3,158,111,930 2,604,911,071

Tax base - -

Deductible/(taxable) temporary difference 3,158,111,930 2,604,911,071 Tax rate 40.00% 40.00%

Closing deferred tax assets/(liabilities) 1,263,244,772 1,041,964,428 Opening deferred tax assets/(liabilities) 1,041,964,428 816,242,841

Deferred tax (expense)/income (A) 221,280,344 225,721,587

ii) Deferred tax on fixed assets Carrying amount 2,355,412,179 2,383,772,155

Tax base 1,901,476,828 1,882,117,267

Deductible/(Taxable) temporary difference 453,935,351 501,654,888 Tax rate 40.00% 40.00%

Closing deferred tax assets/(liabilities) (181,574,140) (200,661,955) Opening deferred tax assets/(liabilities) (200,661,955) (196,957,860)

Deferred tax (expense)/income (B) 19,087,815 (3,704,095)

Deferred tax (expense)/income (A+B) 240,368,158 222,017,492

10.6 Income generating other assets Investment in subsidiary-IFIC Securities Limited 10.4 799,994,000 799,994,000

Investment in subsidiary-IFIC Money Transfer UK 10.4 31,577,940 34,885,920

831,571,940 834,879,920

10.7 Non-Income generating other assets Stationery and stamps 25,706,892 23,880,960 Sundry debtors 136,721,982 134,948,472 Advance against bills, new branches 15,376,060 32,501,733

Advance against TA / DA 1,397,340 1,095,990

Law charges 145,795,033 130,206,562 Advance against insurance premium 3,166,678 501,307 Advance against rent 292,176,202 317,008,488

Advance income tax 2,265,368,517 1,578,711,636 Sanchaya patra paid 147,811,009 131,687,663 Wage earners development bond paid 27,528,369 6,992,551 Security deposit including demand note 11,846,191 6,277,571 Advance against car purchase 207,434,464 228,842,260

Protested bills 22,200,650 22,121,026 Accrued interest and other interest receivable 968,019,361 848,795,327 CIB charges 855,444 92,904 Deferred tax assets 10.5 1,081,670,632 841,302,473 Cash remittance 34,000,000 12,500,000


Page | 84


Moneygram 30,462,989 34,685,105


Others 76,520,561 52,005,284 5,504,614,342 4,411,072,878 Off-shore banking unit 71,566,220 145,731,263

5,576,180,562 4,556,804,141

10.a Consolidated other assets IFIC Bank Limited 10 6,407,752,502 5,391,684,061

Less: Investment in IFIC Securities Limited 10.4 799,994,000 799,994,000

Less: Investment in IFIC Money Transfer (UK) Limited 10.4 31,577,940 34,885,920 5,576,180,562 4,556,804,141 IFIC Securities Limited 147,785,841 178,781,383

IFIC Money Transfer (UK) Limited 605,244 668,647

5,724,571,647 4,736,254,171 11 Non-banking assets

Through the verdict of honorable court under section 33(7) of the Artharin Adalat Act 2003, the Bank has got an absolute ownership on few mortgaged properties. These properties were recorded at BDT 373,474,800 as non-banking assets in the year 2013.

12 Borrowing from other banks, financial institutions and agents

In Bangladesh 4,654,243,835 6,651,311,614

Outside Bangladesh 392,000,000 549,502,100

5,046,243,835 7,200,813,714

12.1 In and outside Bangladesh

Short term borrowing

Basic Bank Limited - 1,000,000,000

National Bank Limited - 700,000,000 Prime Bank Limited - 200,000,000 - 1,900,000,000 Obligation under lease finance 35,651,361 37,973,238

35,651,361 1,937,973,238 Refinance from Bangladesh Bank

Export Development Fund (EDF) 4,040,281,137 4,314,222,031 Small and Medium Enterprise 578,311,337 399,116,344 4,618,592,474 4,713,338,376 In Bangladesh 4,654,243,835 6,651,311,614 Outside Bangladesh 392,000,000 549,502,100 5,046,243,835 7,200,813,714

12.2 Secured and unsecured borrowing from other banks, financial institutions and agents

Secured borrowing - - Unsecured borrowing 5,046,243,835 7,200,813,714 5,046,243,835 7,200,813,714 12.3 Maturity grouping of borrowing from other banks,

financial institutions and agents Payable

On demand 3,544,565 1,056,000 Up to 1 month 885,547,788 2,047,338,639 Over 1 month but not more than 3 months 1,781,002,401 1,690,598,876 Over 3 moths but not more than 1 year 2,038,000,633 3,127,612,836 Over 1 year but not more than 5 years 338,148,447 292,283,553

Over 5 years - 41,923,810

5,046,243,835 7,200,813,714

Page | 85


12.a Consolidated borrowing from other banks,

financial institutions and agents In Bangladesh

IFIC Bank Limited 4,654,243,835 6,651,311,614


IFIC Money Transfer (UK) Limited - - 6,263,702,828 8,239,335,749 Less: Inter -company transactions 1,263,766,052 1,295,383,173

Outside Bangladesh

4,999,936,776 6,943,952,576

IFIC Bank Limited 392,000,000 549,502,100

IFIC Securities Limited - -


392,000,000 549,502,100

5,391,936,776 7,493,454,676

13 During the year 2016, the Bank with prior consent of Bangladesh Securities and Exchange Commission (vide letter no.

BSEC/CI/DS-32/2015/644 dated 28 December 2015) and Bangladesh Bank (vide letter no. BRPD(BFIS)661/18B(P)/2016-938

dated 08 February 2016 and BRPD(BFIS)661/18B(P)/2016-2475 dated 17 April 2016), issued 07 (seven) years Tier-II Non-

Convertible Coupon Bearing Subordinated Bonds to several banks. Coupon Ceiling and Floor rates of the Bond are 11.0% and

7.0% respectively. The reference rate of the Bond is latest published 182 days Treasury Bill yield plus margin of 4.80%. The bond

will be redeemable at the rate of 20% from 3rd year to the end of the bond tenur i.e. 7th year. The outstanding balance of the Bond

as per subscriber is as follows: Sonali Bank Limited 1,000,000,000 -

Janata Bank Limited 1,000,000,000 -

Rupali Bank Limited 1,000,000,000 -

Agrani Bank Limited 500,000,000 -

3,500,000,000 -

14 Deposits and other accounts Current deposit and other accounts 14.1 18,741,569,699 17,411,524,226

Bills payable 14.2 2,350,923,777 1,473,570,630

Savings bank deposits 14.3 26,205,220,198 24,496,108,248

Fixed deposits 14.4 106,286,853,259 103,438,502,428

153,584,566,933 146,819,705,532

14.1 Current deposit and other accounts

Current accounts 10,840,413,069 9,527,215,111

Foreign currency deposit 729,780,054 1,002,570,119

Resident foreign currency deposit 43,352,701 43,727,497

Exporters foreign currency account 4,899,611,834 5,227,213,326

Margin on letters of credit 1,388,983,832 968,836,637

Margin on letters of guarantee 327,511,446 330,148,676

Investors' account credit balance 549,350 548,938

Q-cash, prepaid, cheque card 2,344,948 2,142,834

Sundry deposit 14.1.1 509,022,465 309,121,088

18,741,569,699 17,411,524,226

14.1.1 Sundry deposit

Sundry creditor 185,317,931 106,294,161

Lease deposit 26,034,819 24,743,476

Risk fund-lease, CCS & others 749,847 794,970

Clearing adjustment 102,606,166 36,109,852

Page | 86


Visa credit card 49,671,436 25,645,521 Sundry deposit BFF 25,912,400 25,912,400

FDD issued but not presented 12,630,626 12,609,186

IBC lodgment 6,004,429 62,595

Other sundry deposits 100,094,811 76,948,927

509,022,465 309,121,088

14.2 Bills payable

Payment order 2,343,061,117 1,463,128,293

Demand draft 5,895,117 6,060,994

Security deposit receipt 1,967,543 4,381,343

2,350,923,777 1,473,570,630

14.3 Savings bank deposit

Savings account 16,508,449,978 15,480,526,093

Super savings plus 8,299,265,210 7,826,272,790

Payroll savings 346,131,545 242,117,559

Sanchita-female savings 939,323,511 873,761,715

Student savings - duronto 111,901,248 73,289,202 Interest payable on savings deposit 148,706 140,889

26,205,220,198 24,496,108,248

14.4 Fixed deposit

Special notice deposit (SND) 18,939,954,250 14,805,642,037

Term deposit 14.4.1 81,631,441,598 83,399,500,647

Recurring deposit 14.4.2 5,677,672,019 5,194,783,032

Non resident foreign currency deposit (NFCD) 8,405,331 8,392,777

Export retention quota (ERQ) 29,380,061 30,183,935 106,286,853,259 103,438,502,428

14.4.1 Term deposit Fixed deposits 64,246,339,220 66,324,177,224 Double return deposit scheme 9,505,453,117 8,529,344,839 Millionaire dream plan 431,105,178 413,610,746 Three years deposit plus 4,200,000 4,200,000 Monthly income scheme 5,884,843,351 6,514,807,077 Monthly income scheme - Arjon 138,872,295 141,322,295

Interest payable on term deposit 1,420,628,437 1,472,038,466 81,631,441,598 83,399,500,647 14.4.2 Recurring deposit Pension savings scheme (PSS) 5,077,704,907 4,697,420,872 Pension savings scheme - Joma 8,108,555 5,949,762 Flexi DPS - Freedom 351,333,529 243,459,937

School savings plan 44,413,379 38,863,253

Interest payable on recurring deposit 196,111,649 209,089,208 5,677,672,019 5,194,783,032

14.5 Deposit and other accounts of the banks

Deposit form banks 327,126,000 1,166,600,000

Deposit from customers 153,257,440,933 145,653,105,532 153,584,566,933 146,819,705,532

14.6 Payable on demand and time deposit Demand deposits

Current deposits 11,645,820,182 10,606,388,434 Savings deposits 2,358,469,818 2,204,649,742 Security deposits 1,967,543 4,381,343 Sundry deposit 2,225,517,743 1,608,106,401

Bills payable 2,348,956,234 1,469,189,287 18,580,731,521 15,892,715,208

Page | 87


Time deposits

Savings deposits 23,846,750,381 22,291,458,506

Fixed deposits 86,400,586,469 88,493,784,456

Special notice deposits 18,939,954,250 14,805,642,037

Deposits under schemes 5,816,544,312 5,336,105,325

135,003,835,412 130,926,990,324

153,584,566,933 146,819,705,532

14.7 Sector-wise concentration of deposits and other accounts Government deposits 3,687,075,000 3,803,794,000

Other public sector 24,406,524,000 20,461,403,000

Deposit for banks 327,126,000 1,166,600,000

Foreign currency deposits 729,780,054 1,002,570,119

Private sectors 124,434,061,879 120,385,338,413

153,584,566,933 146,819,705,532

14.8 Unclaimed deposits Current deposits 989,851 639,715

Savings deposits 3,388,468 1,921,764

Special notice deposits 560,893 366,079 Pay order 4,208,246 358,300 Demand Draft 516,764 10,000

Sundry Creditors 219,163 16,000

9,883,385 3,311,858

14.9 Residual maturity grouping of deposits and other accounts Maturity grouping of deposit from banks Payable

On demand 327,126,000 1,166,600,000

Up to 1 month - - Over 1 month but not more than 3 months - - Over 3 moths but not more than 1 year - - Over 1 year but not more than 5 years - - Over 5 years - -

327,126,000 1,166,600,000

Maturity grouping of deposit from customers excluding bills payable Payable

On demand 4,640,233,565 5,991,155,032

Up to 1 month 19,673,490,258 15,460,588,373

Over 1 month but not more than 3 months 30,489,734,690 27,450,939,281

Over 3 moths but not more than 1 year 36,138,019,664 33,969,252,071


Over 5 years 17,224,736,657 18,728,733,041

150,906,517,156 144,179,534,902

14.10 Maturity grouping of bills payable Payable

On demand - -

Up to 1 month 739,547,159 442,021,187

Over 1 month but not more than 3 months 460,393,319 294,714,126

Over 3 moths but not more than 1 year 230,196,660 147,407,065

Over 1 year but not more than 5 years 460,393,319 294,714,126

Over 5 years 460,393,319 294,714,126

2,350,923,777 1,473,570,630

Page | 88


14.a Consolidated deposits and other accounts

Current deposits and other accounts

IFIC Bank Limited 14.1 18,741,569,699 17,411,524,226 IFIC Securities Limited 58,947,228 34,940,487 IFIC Money Transfer (UK) Limited - - 18,800,516,927 17,446,464,713 Less: Inter -company transactions 79,819,766 6,434,715

18,720,697,161 17,440,029,998

Bills payable




2,350,923,777 1,473,570,630

Savings bank deposit




26,205,220,198 24,496,108,248

Fixed deposits




106,286,853,259 103,438,502,428

153,563,694,395 146,848,211,304

15 Other liabilities Specific provision for classified loans and advance 15.1 3,300,211,628 2,699,917,003

General provision for unclassified loans and advances 15.2 1,332,356,952 1,282,300,000

Provision for off balance sheet 15.3 540,219,892 478,720,000

Provision for diminution in value of investments 15.4 550,852,496 394,000,000

Provision for nostro account 15.5 9,843,120 9,862,000

Provision for other assets 15.6 307,838,358 296,416,223

Provision for taxation 15.7 4,548,795,584 3,698,795,584

Interest suspense accounts 15.8 3,952,979,443 3,217,989,895

Interest payable on borrowing from Banks & FI's 45,025,058 8,580,484

Accrued expenses 89,755,975 29,894,147

Withholding Tax payable to government (*) 112,218,945 133,947,130

Withholding VAT payable to government (*) 18,794,706 27,942,952

Excise duty payable to government (*) 7,250,954 129,230,430

Dividend payable 2,814,447 2,814,447

Payable to good borrowers 10,000,000 10,000,000

Bonus payable - 130,000,000

Revaluation of investment abroad 28,184,837 28,184,837

Exporter's cash assistance 54,870 10,300

Oman International Exchange (LLC) 10,072,146 8,295,427

Sale proceeds of PSP & TC 5,963,999 1,999,232

Local commission on export 9,586,281 8,536,132

Recovery on court cases 4,346,521 4,391,447

Others 60,868,201 57,391,179

14,948,034,413 12,659,218,849

* Subsequently deposited to government exchequer.

Page | 89


15.1 Specific provision for classified loans and advances

Provision held at the beginning of the period/year 2,699,917,003 1,966,388,319

Less: Fully provided debts written off (993,710,315)

Add: Recoveries of amounts previously written off 97,612,716 91,978,387

Add: Specific provision for the period/year 502,681,909 1,734,560,613

Less: Provision transferred to general reserve*(note-18) (99,300,000)

Add: Net charge to profit and loss account - - 3,300,211,628 2,699,917,003

* As per BRPD Circular No.-04 dated 29 January 2015, surplus provision against restructured large loan transferred to general reserve.

15.1.1 Specific provision required for classified loans and advances

Status of loans and advances

Base for Rate(%)

Required provision at Required provision

provision 30 June 2016 at 31 December 2015

Sub-standard 705,493,197 20.00% 141,098,639 92,470,898

Sub-standard- Short term agri. credit 20,021,177 5.00% 1,001,059 482,816

Doubtful 1,083,970,141 50.00% 541,985,071 328,947,540

Doubtful- Short term agri. credit 1,272,897 5.00% 63,645 13,656

Bad/loss 2,616,063,214 100.00% 2,616,063,214 2,275,949,875

4,426,820,626 3,300,211,628 2,697,864,785

Specific provision maintained (note-15.1) 3,300,211,628 2,699,917,003

Excess/(short) - 2,052,218

15.2 General provision for un-classified loans & advances Provision held at the beginning of the period/year 1,263,200,000 1,058,200,000

Provision made during the period/year 54,020,684 205,000,000 1,317,220,684 1,263,200,000

Off-shore Banking Unit (OBU)

Provision held at the beginning of the period/year 19,100,000 18,100,000 Provision made during the period/year (3,963,732) 1,000,000

15,136,268 19,100,000

1,332,356,952 1,282,300,000

15.2.1 General provision required for un-classified loans and advances

Status

Base for provision Rate (%)


30 June 2016 at 31 December 2015

General provision-for unclassified

Standard

Small and medium enterprise 22,511,760,948 0.25% 56,279,402 44,195,422

House building loan and loan for professional 7,125,285,401 2.00% 142,505,708 75,542,421

Loans to BHs/MBs/SDs share etc 2,181,121,827 2.00% 43,622,437 44,156,555

Consumer finance 3,464,879,856 5.00% 173,243,993 165,933,769

Short term agri. and micro-credit 2,503,014,580 2.50% 62,575,365 54,948,158

Staff loan 1,939,876,786 0.00% - -

Other unclassified loan 66,778,736,487 1.00% 667,787,365 724,228,066 106,504,675,885 1,146,014,270 1,109,004,391

Special Mention Account (SMA)

Small and medium enterprise 312,448,603 0.25% 781,122 827,578

House building loan and loan for professional 108,621,574 2.00% 2,172,431 1,824,870

Consumer finance 38,698,776 5.00% 1,934,939 1,641,774

Other unclassified loan 10,736,885,607 1.00% 166,317,922 149,593,558

11,196,654,560 171,206,414 153,887,780

Page | 90


Off-shore banking unit

Un-classified loans 1,513,626,799 1.00% 15,136,268 18,966,562

1,513,626,799 15,136,268 18,966,562

1,332,356,952 1,281,858,733

General provision maintained (note-15.2) 1,332,356,952 1,282,300,000

Excess/(short) - 441,267 15.2.2 As per BRPD Circular No.-04 dated 29 January 2015, 5 (five) loan accounts of 3 (three) clients were restructured in the year

2015. The details of the restructured loans are disclosed in Annexure - J.

15.3 Provision for off-balance sheet Provision held at the beginning of the period/year 478,720,000 478,720,000

Provision made during the period/year 61,499,892 - 540,219,892 478,720,000

15.3.1 Provision required for off-balance sheet exposure

Status Base for

Rate (%) Required provision at Required provision


Acceptances and endorsements 17,865,901,197 1.00% 178,659,012 142,107,618.00

Letters of guarantee 9,554,723,447 1.00% 95,547,234 97,066,317.00

Irrevocable letters of credit 15,393,596,728 1.00% 153,935,967 148,003,248.00

Bills for collection 11,207,767,788 1.00% 112,077,678 90,613,095.00

Required provision 54,021,989,160 540,219,892 477,790,278

Provision maintained (note-15.3) 540,219,892 478,720,000

Excess/(short) - 929,722

15.4 Provision for diminution in value of investments Provision held at the beginning of the period/year 394,000,000 330,000,000

Provision made during the period/year 156,852,496 64,000,000

550,852,496 394,000,000

15.5 Provision for nostro account Provision held at the beginning of the period/year 9,862,000 9,862,000

Provision made during the period/year (18,880) -

9,843,120 9,862,000

15.6 Provision for other assets Provision held at the beginning of the period/year 296,416,223 271,234,653

Less: written off during the period/year - (1,000,000)

Provision made during the period/year 11,422,135 26,181,570

307,838,358 296,416,223

15.6.1 Particulars of required provision for other assets

Status

Base for Rate (%)



Other assets for 6-12 months 27,841,544 50% 13,920,772 15,409,460

Other assets for more than 12 months 271,716,936 100% 271,716,936 258,120,678

Protested bills 22,200,650 100% 22,200,650 21,891,696 Required provision 307,838,358 295,421,834

Provision maintained (note-15.6) 307,838,358 296,416,223

Excess/(Short) - 994,389

15.7 Provision for taxation

Balance at 1 January 3,698,795,584 2,748,795,584

Provision made during the period/year 850,000,000 950,000,000 4,548,795,584 3,698,795,584

Adjustment made during the period/year - -

4,548,795,584 3,698,795,584

Page | 91


The provision for corporate tax has been made as per Income Tax Ordinance 1984 (amended up to Finance Act 2016) and the Bank has made adequate current tax provision in the books of accounts. Assessments for the years 1983 to 2002 and 2005, 2009, 2011 and 2012 have been completed by the Tax Authority and there is no tax

liability remained outstanding agaisnt those year. The assessment years of 2003, 2004, 2006, 2007, 2008 and 2010 are currently held

with the Honorable High Court and for the year 2013, the Bank is also planning to file an appeal before the Honorable High Court. The

assessment for the year 2014 has yet to be completed by the Tax Authority.

However, full tax provisions have been made in the financial statement for the respective years based on the latest assessment orders made by the Tax Authority. The Return for the year 2015 yet to be submitted by the Bank however the Bank has taken time extension for submission of the same till 13 September 2016.

15.7.1

Reconciliation of effective tax (Bank only) % in HY2016 % in Y2015 30 June 2016 31 December 2015

Profit before income tax charged for current period/year 1,268,925,446 1,614,963,534

Income tax as per applicable tax rate 40% 40.00% 507,570,178 645,985,414

Factor affecting the tax charge for current period/year

Non deductible expenses 28.79% 33.10% 365,298,559 534,546,313

Tax savings from reduced tax rate from dividend -0.63% -1.99% (7,981,762) (32,174,769)

Tax savings from reduced tax rate from capital gain -1.17% -0.46% (14,886,974) (7,366,169)

Adjustment for previous period/years 0.00% -11.83% - (190,990,789)

Change in recognised deductible temporary differences -18.94% -13.75% (240,368,158) (222,017,492)

Total income tax expenses 48.04% 45.08% 609,631,842 727,982,508

15.8 Interest suspense account Balance at the beginning of the period/year 3,217,989,895 2,673,329,603

Add: Amount transferred to interest suspense account during the period/year 1,117,669,148 1,962,382,331 Less: Amount transferred to interest income account during the period/year (382,679,600) (1,257,215,059)

Less: Amount written-off during the period/year - (160,506,979)

3,952,979,443 3,217,989,895

15.a Consolidated other liabilities IFIC Bank Limited 14 14,948,034,413 12,659,218,849



16,539,751,786 14,025,345,914

16 Share Capital

16.1 Authorized Capital

2,000,000,000 ordinary shares of Taka 10 each 20,000,000,000 20,000,000,000 16.2 Issued, subscribed and fully paid up capital

8,000,000 ordinary shares of Taka 10 each issued for cash 80,000,000 80,000,000 4,400,000 ordinary shares of Taka 10 each issued as right share* 44,000,000 44,000,000

491,012,417 [Up to year 2015: 491,012,417] ordinary shares of Taka 10 each 4,910,124,170 4,910,124,170 issued for bonus share

5,034,124,170 5,034,124,170

*Out of the total issued, subscribed and fully paid-up Capital of the Bank 440,000 ordinary shares of BDT100 each (before

splitting) amounting to BDT 44,000,000 was raised through public offering of shares (Rights Issue at par) held in 1989 and

subsequent issue of the Right Shares on 30 January 1990.

16.3 Issued, subscribed and fully paid up Capital-Shareholders' Category

338,552,111 [Year 2015: 338,552,111] ordinary shares of Taka 10 each fully paid held by the Sponsors, Directors, Institutions, Foreign investors & General Public.

164,860,306 [Year 2015: 164,860,306] ordinary shares of BDT 10 each fully paid held by the Government of the People's Republic of Bangladesh.

3,385,521,110 3,385,521,110

1,648,603,060 1,648,603,060

5,034,124,170 5,034,124,170

Page | 92


16.4 Solo Capital Adequacy Ratio (BASEL III)

As per section 13(2) of the Bank Companies Act, 1991(amended upto 2013), BRPD circular no. 18 dated 21 December 2014, Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III) was issued and effective from 1 January 2015. Capital to Risk-weighted Asset Ratio (CRAR) is calculated as follows:

Common Equity Tier 1 (going-concern capital)

Paid-up capital 5,034,124,170 5,034,124,170

Statutory reserve 16 4,486,284,969 4,232,499,880 General reserve 17 155,071,397 155,071,397 Retained earnings 21 2,481,319,720 2,075,811,205

Regulatory Adjustments: 12,156,800,256 11,497,506,652

Deduction from Tier-1 Capital (95% of deferred tax assets) 1,200,082,533 989,866,207

Total Common Equity Tier 1 Capital 10,956,717,723 10,507,640,445 Tier-2 (Gone-Concern Capital) General provision Subordinated debt that meet the qualifying criterial for Tier 2 Revaluation Reserves as on 31 December 2014 (50% of Fixed Assets and 10% of Equity Securities) Regulatory Adjustments: Revaluation reserve (40% of BDT 58,445,121)

1,332,356,952 1,258,726,128

3,500,000,000 -

58,445,121 58,445,121

23,378,048 11,689,024

Total Tier-2 Capital 4,867,424,025 1,305,482,225

Total Regulatory Capital 15,824,141,747 11,813,122,670

Total assets including off-balance sheet items 243,375,588,847 226,112,979,165

Total risk-weighted Assets 135,816,400,411 117,314,424,992

Required capital 14,430,492,544 11,731,442,499

Total capital surplus 1,393,649,204 81,680,171

Capital to Risk-weighted Asset Ratio (CRAR):

Common Equity Tier 1 to RWA 8.07% 8.96%

Tier - 2 Capital to RWA 3.58% 1.11%

Capital to Risk-weighted Asset Ratio (CRAR) 11.65% 10.07%

For details computation of risk-weighted assets please see "Annexure - E" 16.4.a Consolidated Capital Adequacy Ratio (BASEL III)

As per section 13(2) of the Bank Companies Act, 1991(amended upto 2013), BRPD circular no. 18 dated 21 December 2014, Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III) was issued and effective from 1 January 2015. The Capital to Risk-weighted Asset Ratio (CRAR) is calculated as follows:

Common Equity Tier 1 (going-concern capital)

Paid-up capital 5,034,124,170 5,034,124,170

Statutory reserve 16 4,486,284,969 4,232,499,880 General reserve 17 155,071,397 155,071,397

Retained earnings 22 3,371,972,342 2,817,321,961

Regulatory Adjustments: 13,047,452,879 12,239,017,408

Deduction from Tier-1 Capital 1,200,082,533 989,866,207

Total Common Equity Tier 1 Capital 11,847,370,345 11,249,151,201

Tier-2 (Gone-Concern Capital)

General provision 1,332,356,952 1,282,300,000

Subordinated debt that meet the qualifying criterial for Tier 2 3,500,000,000 -

Revaluation Reserves as on 31 December 2014 58,445,121 58,445,121

(50% of Fixed Assets and 10% of Equity Securities)

Page | 93

Amount in BDT Note 30 June 2016 31 December 2015 Regulatory Adjustments:

Revaluation reserve 23,378,048 11,689,024 Total Tier-2 Capital 4,867,424,025 1,329,056,097 Total Regulatory Capital 16,714,794,370 12,578,207,298

Total assets including off-balance sheet items 246,147,671,477 228,516,420,853 Total risk-weighted Assets 138,488,602,498 122,818,380,420

Required capital 14,714,414,015 12,281,838,042

Total capital surplus 2,000,380,354 296,369,256

Capital to Risk-weighted Asset Ratio (CRAR): Common Equity Tier 1 to RWA 8.55% 9.16% Tier – 2 Capital to RWA 3.51% 1.08% Capital to Risk-weighted Asset Ratio (CRAR) 12.07% 10.24%

16.5 Shareholding by category

30 June 2016

31 December 2015

Category

No. of Share % Taka

No. of Share

%

Taka

Sponsors 32,642,018 6.48 326,420,180 32,642,018 6.48 326,420,180

Directors 10,071,085 2.00 100,710,850 10,071,085 2.00 100,710,850

Government 164,860,306 32.75 1,648,603,060 164,860,306 32.75 1,648,603,060

Institutions 111,616,033 22.17 1,116,160,330 107,931,225 21.44 1,079,312,250

Foreign investors 2,115,211 0.42 21,152,110 2,148,621 0.43 21,486,210

General investors 182,107,764 36.18 1,821,077,640 185,759,162 36.90 1,857,591,620

16.6 Total 503,412,417 100.00 5,034,124,170 503,412,417 100.00 5,034,124,170

Distribution of paid up capital

Holding of share

30 June 2016 31 December 2015

No. ofholder

Total shares %

No. of holder

Total shares

%

1 to 500 shares 21,620 2,600,447 0.52 23,850 2,821,887 0.56

501 to 5000 shares 9,170 15,509,568 3.08 9,761 16,465,643 3.27

5,001 to 10,000 shares 1,006 7,238,254 1.44 1,056 7,588,449 1.51

10,001 to 20,000 shares 543 7,570,106 1.5 595 8,389,377 1.67

20,001 to 30,000 shares 187 4,631,067 0.92 190 4,709,901 0.93

30,001 to 40,000 shares 78 2,744,878 0.54 94 3,303,763 0.66

40,001 to 50,000 shares 52 2,403,483 0.48 58 2,654,417 0.53

50,001 to 100,000 shares 126 8,928,074 1.77 126 8,958,052 1.78

100,001 to 1,000,000 shares 154 48,119,327 9.56 159 49,389,929 9.81

More than 1,000,000 shares 62 403,667,213 80.19 60 399,130,999 79.28 Total 32,998 503,412,417 100.00 35,949 503,412,417 100.00

16.7 Shareholding of Directors as at 30 June 2016

Sl. Name of the Directors Status Holding % Closing Position Opening Position 1 Mr. Salman F Rahman Chairman 2.00 *10,071,085 10,071,085

2 Mr. Monirul Islam Independent Director Nil Nil Nil 3 Mr. Anwaruzzaman Chowdhury Independent Director Nil Nil Nil 4 Mr. Jalal Ahmed ** Govt. nominated Director

5 Mr. A. R. M. Nazmus Sakib ** Govt. nominated Director 32.75 164,860,306 164,860,306

6 Ms. Quamrun Naher Ahmed** Govt. nominated Director

7 Mr. M. Shah Alam Sarwar Managing Director Nil Nil Nil

* The ownership of 10,002,532 nos. shares (1.987%) i.e. 807,470 nos. paper shares plus 9,195,062 nos. bonus shares kept in Suspense Account is pending with the Appellate Division of the

Supreme Court in Civil Misc. Petition No. 417 of 2009.

** Directors nominated by the Ministry of Finance, Govt. of the People's Republic of Bangladesh against its holding of 32.75% shares in the Bank.

17 Statutory reserve

Opening balance on 1 January 4,232,499,880 3,909,507,173

Transferred from profit during the period/year 253,785,089 322,992,707

4,486,284,969 4,232,499,880

Page | 94


18 General reserve

Opening balance on 1 January 155,071,397 55,771,397

Transferred from provision during the period/year*(note -15.1) - 99,300,000

155,071,397 155,071,397

* As per BRPD Circular No.-04 dated 29 January 2015, surplus provision against restructured large loan transferred from

specific provision.

19 Revaluation reserve against securities HTM securities 19.1 2,074,232 2,074,232

HFT securities 19.2 565,314 39,317,708

2,639,546 41,391,939

19.1 Revaluation reserve HTM securities Opening balance on 1 January 2,074,232 1,444,649

Gain/(loss) from revaluation on investments - 629,583

2,074,232 2,074,232

19.2 Revaluation reserve HFT securities Opening balance on 1 January 39,317,708 130,890

Gain/(loss) from revaluation on investments (38,752,394) 39,186,817

565,314 39,317,708

19.a Consolidated revaluation reserve against securities

IFIC Bank Limited 19 2,639,546 41,391,939



2,639,546 41,391,939

20 Revaluation reserve against fixed assets Opening balance on 1 January 115,314,704 115,314,704

Addition during the period/year - -

Depreciation charged during the period/year - -

115,314,704 115,314,704

In terms of Bangladesh Accounting Standard (BAS)-16, "Property, Plant & Equipment" and instruction contained in BRPD Circular No. 10 dated 25 November 2002 issued by Bangladesh Bank, gain on revaluation of BDT 115,314,704 has been credited to revaluation reserve account.

20.a Consolidated foreign currency translation reserve

IFIC Money Transfer (UK) Ltd. 3,122,594 1,851,880

Investment in joint venture/associate (NBBL) (38,340,214) (27,327,489)

Investment in joint venture/associate (OIE LLC) 102,422 125,220

(35,115,198) (25,350,388)

21 Surplus in profit and loss account Opening balance on 1 January 2,075,811,205 2,168,447,775

Net profit after tax for the period/year 659,293,604 886,981,027

Appropriation made to statutory reserve during the period/year (253,785,089) (322,992,707)

Issue of bonus shares - (656,624,890)

2,481,319,720 2,075,811,205

22 Consolidated surplus in profit and loss account IFIC Bank Limited 21 2,481,319,720 2,075,811,205


IFIC Money Transfer (UK) Limited (15,418,307) (15,038,758)

Share of profit of investment in joint venture/associate (NBBL) 637,413,985 477,936,681

Share of profit of investment in joint venture/associate (OIE LLC) 69,706,260 68,380,642

Exchange (gain)/loss on investment in joint venture/associate (NBBL) 8,674,251 7,585,807

Exchange (gain)/loss on investment in joint venture/associate(OIE LLC) (102,422) (125,220)

3,371,972,342 2,817,321,961

Page | 95


23 Non-controlling interest IFIC Securities Limited 7,430 7,521


7,430 7,521

24 Contingent liabilities Acceptances and endorsements 24.1 17,865,901,197 14,210,761,791 Letters of guarantee 24.2 9,554,723,447 9,706,631,662 Irrevocable Letters of credit 24.3 15,393,596,728 14,800,324,793 Bills for collection 24.4 11,207,767,788 9,061,309,529 Other contingent liabilities - - 54,021,989,160 47,779,027,775

24.1 Acceptances and endorsements

Back to back bills (local currency) 224,797,895 210,646,535 Back to back bills (foreign currency) 17,641,103,302 14,000,115,256 17,865,901,197 14,210,761,791

24.2 Letters of guarantee Letters of guarantee (local currency) 9,385,417,222 9,119,223,597

Letters of guarantee (foreign currency) 169,306,225 587,408,065

9,554,723,447 9,706,631,662

Money for which the bank is contingently liable in respect of guarantee issued favoring:

Directors - -

Government 3,840,257,305 3,901,312,619

Banks and other financial institutions 2,909,381,087 2,955,636,627

Others 2,805,085,054 2,849,682,417

9,554,723,447 9,706,631,662

24.3 Irrevocable letters of credit

Letter of credit (LC) - cash sight 8,348,848,770 6,976,088,529

Letter of credit (LC) - back to back 6,277,433,195 7,180,355,410

Letter of credit (LC) - cash usance 767,314,763 643,880,854

15,393,596,728 14,800,324,793

24.4 Bills for collection

Inland bills collection 60,316,254 53,332,862

Foreign bills collection 19,400,759 21,366

Inland documentary bills for collection 4,735,449,694 3,876,020,605

Foreign documentary bills for collection 6,392,601,081 5,131,934,696 11,207,767,788 9,061,309,529

Page | 96

Notes to the Financial Statements

as at and for the half year ended 30 June 2016 Amount in BDT

Note 1 January to 1 January to

30 June 2016 30 June 2015

25 Income statement

Income

Interest, discount and similar income 25.1 7,181,074,967 7,309,921,421

Dividend income 25.2 39,908,812 126,022,808 Capital gain Income 25.3 49,623,248 7,250,851

Fees, commission and brokerage 29.1 369,955,505 352,216,128

Gains less losses arising from dealing in securities - -

Gains less losses arising from investment securities - -

Gain less losses arising from dealing in foreign currencies 29.2 365,674,737 382,544,910

Income from non-banking assets - -

Other operating income 304,343,628 262,832,443

Profit less losses on interest rate change - -

8,310,580,897 8,440,788,562

Expenses Interest, fee and commission 27 4,126,226,558 4,338,502,794

Losses on loan and advances 39 - -

Administrative expenses 31-34,36-38 1,486,756,672 1,410,468,183

Other operating expenses 35,40,41 535,947,775 438,098,974

Depreciation on banking assets 110,229,943 114,275,816

6,259,160,948 6,301,345,767

2,051,419,949 2,139,442,795

25.1 Interest, discount and similar income Interest income 26 6,183,111,784 6,219,482,802

Interest on treasury bills and bonds 28.1 817,932,030 728,866,709

Interest on debentures 144,000 325,000

Interest on other bonds - 20,443,579

Interest on fixed deposit 179,085,335 315,041,055

Income on reverse repo 801,818 25,762,276

7,181,074,967 7,309,921,421

25.2 Dividend income

Dividend income - local 39,908,812 42,226,511

Dividend income - foreign - 83,796,297

39,908,812 126,022,808

25.3 Capital Gain income

Gain from sale of shares of listed companies 49,623,248 7,250,851

49,623,248 7,250,851

26 Interest income

Term loan-industrial 571,572,524 373,368,848

Term loan-consumer finance 3,837,913 5,318,832

Term loan-others 1,123,522,668 1,150,863,730

House building loan 424,532,373 117,544,555

Staff house building loan 40,717,047 37,338,371

Staff loan against PF 728,783 4,258,035

Page | 97

Amount in BDT


30 June 2016 30 June 2015

Transport loan 53,803,994 55,602,262

Agricultural Loan 71,464,176 66,048,268

Loan general 85,997,325 163,042,998

Secured overdraft 1,241,634,699 1,442,234,225

Over draft-staff salary 4,758,192 4,813,783

Over draft-garments 46,132,265 37,785,271

Cash credit 1,564,008,501 1,688,331,085

Lease finance 40,108,276 46,055,553

Inland documentary bill purchased (IDBP) 81,048,269 103,975,018

Foreign documentary bill purchased (FDBP) 5,788,277 7,375,073

Payment against document (cash) 18,203,366 24,262,929

Payment against document (forced) 30,987,932 58,721,933

Payment against document (EDF) 43,600,242 48,878,257

Payment against document (inland) 10,184,966 22,004,413

Payment against document (others) 57,360,793 12,353,506

Loan against imported merchandise 5,249,524 7,737,949

Loan against trust receipt (LTR) 408,209,536 421,447,138

Export cash credit 4,426,497 2,742,107

Credit card 17,641,644 17,518,953

Money at call on short notice 25,439,875 35,908,653

Balance held outside Bangladesh 41,071,148 49,882,372

Balance held inside Bangladesh 1,411,428 416,887

Demand loan 141,713,317 188,987,684

Others 11,987,146 20,338,575

6,177,142,696 6,215,157,261


6,183,111,784 6,219,482,802

26.a Consolidated interest income


IFIC Securities Limited 121,951,509 101,190,215 IFIC Money Transfer (UK) Limited - -

6,305,063,293 6,320,673,017

Less: Inter -company interest income 69,970,171 75,706,721

6,235,093,122 6,244,966,296

27 Interest paid on deposits, borrowings etc. Interest paid on deposits Current deposit 820,993 -

Saving bank deposit 468,895,270 475,749,307

Special notice deposit 295,637,762 366,497,789

Fixed deposit 2,224,328,908 2,364,690,283

Non resident FC deposit 104,171 103,093

Resident FC deposit 21,364 18,070

Pension savings scheme 243,155,144 201,383,504

Monthly income scheme 804,970,060 839,663,373

Foreign currency deposit 178,901 103,692

4,038,112,573 4,248,209,111

Page | 98

Amount in BDT


30 June 2016 30 June 2015

Interest paid on borrowings

Call deposit 27,337,070 5,394,208

Local banks accounts 2,122,500 43,021,016

Foreign banks accounts 8,215,226 12,291,396

Repurchase agreement (repo) 2,507,516 16,461,645

Bangladesh Bank SME refinance 13,086,946 5,144,611

Payment against lease obligation 3,054,249 3,405,207

Interest paid on subordinated bond 30,061,644 -

Discount paid 1,543,691 1,060,854

Others 185,144 3,514,745 88,113,986 90,293,683

4,126,226,558 4,338,502,794

27.a Consolidated interest paid on deposits, borrowings etc.



IFIC Money Transfer (UK) Limited - - 4,216,232,348 4,433,097,648

Less: Inter -company interest paid 69,970,171 75,706,721

4,146,262,177 4,357,390,927

28 Investment income

Interest income

Treasury bills and bonds 28.1 817,932,030 728,866,709

Debentures 144,000 325,000

Other bonds - 20,443,579

Term placement 179,085,335 315,041,055

Reverse repo 801,818 25,762,276 997,963,183 1,090,438,619

Non interest income

Gain from sale of shares of listed companies 49,623,248 7,250,851

Dividend income - local 39,908,812 42,226,511

Prize bond 5,000 45,000

Dividend income - Foreign - 83,796,297

89,537,060 133,318,659

1,087,500,243 1,223,757,278

28.1 Treasury bonds

Interest on treasury bonds 835,078,089 794,255,509

Less: Holding period interest on HTM securities 17,146,059 65,388,801

817,932,030 728,866,709

28.a Consolidated investment income IFIC Bank Limited 28 1,087,500,243 1,223,757,278

IFIC Securities Limited 7,278,658 42,900


Less:

Adjustments for investment in joint venture/associate(NBBL) - (83,796,297)

Adjustments for investment in joint venture/associate(OIE LLC) - -

1,094,778,901 1,140,003,881

29 Commission, exchange and brokerage

Commission 29.1 369,955,505 352,216,128

Exchange gain/(loss) 29.2 365,674,737 382,544,910

735,630,242 734,761,039

Page | 99

Amount in BDT


30 June 2016 30 June 2015

29.1 Commission

Bills purchased (Inland) 316,285 372,251

Bills purchased (Foreign) 2,227,406 1,871,995

Remittances (inland) 9,789,893 10,967,558

Remittances (foreign) 3,525,839 2,387,703

Letter of guarantee (LG)-local 58,286,722 44,965,874

Letter of guarantee (LG)-foreign 257,092 1,169,234

Letter of credit (back to back) 61,330,774 63,691,601

Letter of credit (cash) 76,624,376 70,465,027

Letter of credit (others) 4,300,797 3,972,551

Wage earners development bond - 1,192,213

LDBC 7,177,078 5,679,013

IFDBC 101,047,010 105,154,060

FDBC 3,706,965 6,046,744

FBC (foreign) 126,300 63,100

Online Charge 17,247,515 18,054,598

Add confirmation 9,000,047 4,797,903

Sanchaypatra 2,449,632 321,970

Commission others 12,541,774 11,042,735

369,955,505 352,216,128

29.2 Exchange gain/(loss)

Rebate from foreign correspondent 37,592,994 30,438,472

Exchange gain from revaluation of FC 328,081,743 352,106,438

365,674,737 382,544,910

29.a Consolidated commission, exchange and brokerage

IFIC Bank Limited 29 735,630,242 734,761,039 IFIC Securities Limited 22,981,490 25,088,095


Exchange (gain)/loss for investment in joint venture/associate(NBBL) 1,088,444 15,184,299

Exchange (gain)/loss for investment in joint venture/associate(OIE LLC) 22,798 33,937 775,733,422 799,109,107

30 Other operating income

Locker rent 5,204,275 3,997,780

Godown rent 902,000 706,000

Other rents 2,181,000 2,432,340

Postage charges recovery 14,198,945 13,145,350

Telex charge recovery 11,236,552 10,743,506

SWIFT charges recovery 33,217,122 61,820,640

Godown insurance recovery 249,000 231,000

Stationery expenses recovery 4,244,700 3,588,010

Miscellaneous earning 103,608,456 52,844,900

Loan processing fees and service charges 68,698,108 54,686,619

Visa card fees and commission 17,434,090 18,127,373

Service charge on accounts 40,114,642 35,868,202

Other fees, commission & charges 2,802,394 4,595,723 304,071,284 262,787,443

Off-shore banking unit 267,344 -

304,338,628 262,787,443

Page | 100

Amount in BDT

Note

1 January to 1 January to

30 June 2016 30 June 2015

30.a Consolidated other operating income




304,403,226 262,883,455

31 Salaries and allowances

Basic salary 522,199,387 507,600,691

House rent allowance 223,309,524 223,370,119

Conveyance allowance 16,192,249 16,481,530

Medical allowances 44,820,141 44,888,480

Entertainment allowance 33,544,906 34,323,826

Other allowances 12,558,756 12,944,758

Leave encashment 1,551,895 4,696,112

Festival bonus 87,886,634 73,117,688

Provident fund- Bank's contribution 51,406,442 49,965,225

Contribution to gratuity fund 60,000,000 51,500,000

1,053,469,934 1,018,888,430

Number of employees for the half year 2016 who were paid remuneration less than BDT 36,000 was nil (half year 2015: nil). Total number of employees employed in the Bank at the end of the half year 2016 were 2,468 (half year 2015: 2,496).

31.a Consolidated salaries and allowances




1,065,375,352 1,031,700,924

32 Rent, taxes, insurance, electricity etc. Rent paid 232,218,670 206,374,797

Rates, taxes and utilities 28,387,321 28,108,901

Insurance premium 65,291,742 63,100,915

Electricity & water 37,128,780 28,627,371

363,026,513 326,211,984

32.a Consolidated rent, taxes, insurance, electricity etc.




370,910,368 333,575,942

33 Legal expenses

Legal expenses 1,220,500 4,448,827

Retainers fees 1,191,000 1,055,000

2,411,500 5,503,827

33.a Consolidated legal expenses




2,937,164 6,195,435

Page | 101

Amount in BDT


30 June 2016 30 June 2015

34 Postage, stamp, telecommunication etc.

Postage expenses 13,081,121 11,915,840

Telephone - office 5,850,280 5,100,903

Telephone - residence 11,769,263 12,047,344

Communication facilities (Reuter, VSAT, Radio etc.) 28,544,061 23,984,857

59,244,725 53,048,943

34.a Consolidated postage, stamp, telecommunication etc.


IFIC Securities Limited 1,876 616


59,329,228 53,119,091

35 Stationery, printing, advertisement etc.

Printing stationery 10,113,517 11,644,262

Security stationery 7,726,244 7,479,374

Petty stationery 8,410,704 8,223,144

Computer stationery 5,413,014 5,622,752

Advertisement and publicity 51,043,903 52,082,177

82,707,382 85,051,709

35.a Consolidated stationery, printing, advertisement etc.




82,828,306 85,661,876

36 Managing Director's salary

Basic salary 5,850,000 4,800,000

House rent allowance 150,000 450,000

House maintenance allowance - 150,000

Provident fund- Bank's contribution 585,000 480,000

Entertainment allowances - 150,000

Festival bonus 975,000 -

7,560,000 6,030,000

37 Directors' fees

Meeting attendance fees 544,000 385,000 544,000 385,000

Each Director is paid BDT 8,000 for attending each meeting as per latest BRPD letter no. 11 dated 4 October 2015 and prior to that each director was paid BDT 5,000 as per BRBD circular no. 03 dated 18 January 2010.

37.a Consolidated Directors' fees

IFIC Bank Limited 37 544,000 385,000



653,250 413,750

38 Auditors' fees

Statutory annual audit fees - -

Interim audit fees 500,000 400,000

500,000 400,000

Page | 102

Amount in BDT

Note

1 January to 1 January to

30 June 2016 30 June 2015

38.a Consolidated Auditors' fees

IFIC Bank Limited 38 500,000 400,000


IFIC Money Transfer (UK) Limited 133,448.00 146,898

693,448 646,898

39 Charges on loan loss - -

40 Depreciation and repair of bank's assets Depreciation

Buildings and premises 14,314,056 14,681,083

Wooden furniture 4,772,783 5,282,425

Steel furniture 1,363,388 1,315,195

Computer equipment 34,317,994 39,118,951

Office equipment 6,487,129 6,387,683

Electrical & gas equipment 16,168,834 15,344,000

Leasehold improvement 11,195,729 10,888,905

Vehicles 4,319,345 515,416

Leased vehicles 3,054,249 1,970,919

Soft furnishing 361,366 479,600

Software 13,875,068 18,291,638

110,229,943 114,275,816

Repairs and maintenance

Property maintenance and repairs 51,426,130 40,069,301

Vehicles maintenance and repairs 35,106,089 34,590,918

86,532,219 74,660,219

196,762,162 188,936,034

40.a Consolidated depreciation and repair of bank's assets




198,387,855 190,933,633

41 Other expenses Entertainment 13,624,839 12,114,026

Petrol, oil and lubricants 51,829,416 43,903,056

Subscription and donation 6,262,100 8,249,501

Training and internship 11,798,129 14,175,635

Books, newspapers and magazines, etc. 830,780 745,528

Uniforms and liveries 1,236,320 1,366,224

Annual General Meeting 361,782 3,826,370

Business development 11,666,127 11,602,241

Crockeries 341,515 321,625

Corporate Social Responsibility (CSR) 41,173,000 12,017,300

Loss on sales of fixed assets 41.1 1,269,951 638,165

Brokerage - 838,080

Traveling expenses 80,902,040 65,884,278

Security services 37,858,527 26,434,516

Bank charges and commission 5,326,672 4,214,445

Recovery and sales agent 4,309,574 2,168,287

Page | 103

Amount in BDT


30 June 2016 30 June 2015

Casual and contractual service 67,388,436 62,583,998

Consultancy fee 681,540 89,146

Visa card expense 2,208,452 2,455,741

Risk charges 6,527,789 6,017,600

Amortization loss HTM securities 6,932,866 -

Revaluation loss on HFT Securities - (8,128,523)

Miscellaneous 14,178,319 6,869,806 366,708,174 278,387,046

41.a Consolidated other expenses



IFIC Money Transfer (UK) Limited 6,835,439 9,029,423 378,329,250 292,532,153

41.1 Gain/ (loss) on sales of fixed assets Cost of fixed assets sold

Wooden furniture 1,167,656 1,403,861 Steel furniture 200,149 633,441 Computer equipment 139,200 11,157,061 Office equipment 427,611 2,973,633


Improve & leasehold premises 3,560,775 834,129

Vehicles 60,000 -


Software - 536,250

8,360,233 22,823,877

Less : Accumulated depreciation

Wooden furniture 843,142 1,110,180 Steel furniture 134,956 507,582 Computer equipment 127,786 10,602,245

Office equipment 422,174 2,793,136


Improve & leasehold premises 2,400,524 743,363

Vehicles 51,947


Software - 509,171

5,938,315 20,579,846

Written down value 2,421,919 2,244,031

Sale proceeds of above fixed assets 1,151,968 1,605,866

Gain / (loss) on sales of fixed assets 1,269,951 638,165

41.b Details of investment in joint ventures/associates i) Nepal Bangladesh Bank Ltd. (NBBL)

Opening balance 1,744,628,768 1,629,195,376

Add: New investment made during the period - - Share of post acquisition profit during the period 159,477,304 121,698,479 Less:

Cash dividend received - (83,796,297) Effect of changes in foreign currency exchange rate (11,012,725) (21,508,628)

Closing balance 1,893,093,347 1,645,588,930

Page | 104

Amount in BDT


30 June 2016 30 June 2015

ii) Oman International Exchange LLC (OIE LLC)

Opening balance 86,223,917 80,098,817

Add:

New investment made during the period - - Share of post acquisition profit during the period 1,325,618 4,254,820 Less:

Cash dividend received - - Effect of changes in foreign currency exchange rate (22,798) (33,937)

Closing balance 87,526,737 84,319,699

Total share of post acquisition profit during the period 160,802,922 125,953,298

Total closing balance of investment in joint ventures/associates 1,980,620,084 1,729,908,629

42 Provision for loans, investments and other assets

Specific provision 502,681,909 575,944,713

General provision 54,020,684 180,000,000

Provision for off-shore banking unit (3,963,732) -

Provision for off-balance sheet exposure 61,499,892 (10,000,000)

Provision for diminution in value of investments 156,852,496 10,000,000

Other provisions 42.1 11,403,255 22,775,569

782,494,504 778,720,283

42.1 Other provisions

Provision for other assets 11,422,135 22,775,569

Provision for nostro account (18,880) -

11,403,255 22,775,569

42.a Consolidated provision for loans, investments and other assets




824,789,689 798,481,465

43 Provision for taxation

Current tax 850,000,000 900,000,000

Deferred tax expense/(income) 43.1 (240,368,158) (208,424,298)

609,631,842 691,575,702

43.1 Deferred tax expense/(income)

Deferred tax on provision for loans and advances (DF & BL) 10.5 (221,280,344) (208,032,633)

Deferred tax on fixed assets 10.5 (19,087,815) (391,665)

(240,368,158) (208,424,298)

43.a Consolidated provision for current tax




864,688,286 904,673,513

43.b Consolidated deferred tax

IFIC Bank Limited 43.1 (240,368,158) (208,424,298)



(240,368,158) (208,424,298)

Page | 105

Amount in BDT


30 June 2016 30 June 2015

44 Receipts from other operating activities

Rent received 8,287,275 7,136,120

Other receipts 296,056,353 274,530,822

Capital gain 25.3 49,623,248 7,250,851

353,966,876 288,917,794

44.a Consolidated cash received from other operating activities




354,047,836 289,056,705

45 Cash paid for other operating activities

Postage, stamp, telecommunication etc. 59,244,725 49,447,045

Rent paid 232,218,670 228,811,194

Rates, taxes & utilities 28,387,321 28,108,901

Insurance premium 65,291,742 63,100,915

Electricity & water 37,128,780 28,627,371

Traveling expenses 80,902,040 65,884,278

Auditors' fees 500,000 400,000

Directors' fees 544,000 385,000

Legal expenses 2,411,500 5,503,827

Other expenses 257,744,771 248,411,032 764,373,549 718,679,563

45.a Consolidated cash paid for other operating activities




784,912,269 741,836,197

46 Cash and cash equivalents

Cash in hand 1,640,659,380 1,915,926,079

Balance with Bangladesh Bank and its agent Bank (s) 12,079,222,425 9,991,650,725

Balance with other banks and financial Institutions 10,680,738,738 9,523,964,390


Prize Bonds 5,113,700 5,832,900

25,005,734,243 22,937,374,095

46.a Consolidated cash and cash equivalents




25,039,838,230 22,961,413,276

47 (Increase)/decrease of other assets

Stationery and stamps 25,706,892 22,352,426

Suspense account 506,727,104 569,828,874

Advance, deposit and prepayments 646,711,556 1,727,707,937

Investment in subsidiaries 831,571,940 836,718,380



Page | 106

Amount in BDT


30 June 2016 30 June 2015


Closing other assets 2,092,693,992 3,267,928,332

Opening other assets 2,122,874,625 2,503,696,237

30,180,633 (764,232,094)

47.a (Increase)/decrease of consolidated other assets

IFIC Bank Limited 47 30,180,633 (764,232,094)


IFIC Money Transfer (UK) Limited 3,371,383 (457,418)

64,547,558 (745,034,049)

48 Increase/(decrease) of other liabilites

Withholding Tax payable to government 112,218,945 93,829,751

Withholding VAT payable to government 18,794,706 30,229,170

Excise duty payable to government 7,250,954 24,119,094

Dividend payable 2,814,447 2,814,447

Revaluation of investment abroad 28,184,837 28,184,837

Exporter's cash assistance 54,870 192,980

Oman International Exchange (LLC) 10,072,146 19,486,554

Sale proceeds of PSP & TC 5,963,999 3,653,801

Local commission on export 9,586,281 16,510,909

Recovery on Court Cases 4,346,521 25,953,730

Others 60,868,201 16,528,768

Closing other liabilities 260,155,907 261,504,042

Opening other liabilities 402,743,513 220,134,559

(142,587,606) 41,369,483

48.a Consolidated increase/(decrease) of other liabilities

IFIC Bank Limited 48 (142,587,606) 41,369,483



83,002,704 233,547,207

49 Gratuity

The company has a gratuity scheme which has been approved on October 2007 by the National Board of Revenue as per the provision of first schedule (Part - C) of the Income Tax Ordinance, 1984. Required liability against gratuity has

been properly provided in the fund account.

50 Earnings Per Share (EPS)*

Net profit after tax 659,293,604 669,146,811

Number of ordinary shares outstanding 503,412,417 503,412,417

Earning Per Share(EPS) 1.31 1.33

50.a Consolidated Earnings Per Share (EPS)

Net profit after tax attributable to equity holders of the Bank 808,435,469 719,984,814


Consolidated Earning Per Share(EPS) 1.61 1.43

* Previous period's figure has been restated.

Page | 107

Amount in BDT


30 June 2016 30 June 2015

51 Net Operating Cash Flow per Share

Net cash flows from operating activities 2,733,319,885 (2,631,072,807)


Net Operating Cash Flow per Share 5.43 (5.23)

* Previous period's/year's figure has been restated.

51.a Consolidated Net Operating Cash Flow per Share

Consolidated net cash flows from operating activities 2,837,779,914 (2,478,007,726)


Consolidated Net Operating Cash Flow per Share 5.64 (4.92)

* Previous period's/year's figure has been restated.

30-Jun-16 31-Dec-15

52 Net Asset Value (NAV) per Share

Net assets value at the end of the period 12,274,754,506 11,654,213,295


Net Asset Value (NAV) per Share 24.38 23.15

52.a Consolidated Net Asset Value (NAV) per Share

Net assets value at the end of the period attributable to equity holders of the 13,130,291,930 12,370,373,663 Bank


Consolidated Net Asset Value (NAV) per Share 26.08 24.57

53 Events after the reporting period

The Board of Directors in its 673rd Meeting held on 27 April 2016 recommended 12% stock dividend for the year ended

31 December 2015 which has been approved by the shareholders in the 39th Annual General Meeting of the Bank held

on 14 July 2016 and subsequently credited to respective BO Accounts on 20 July 2016.

Page | 108

Balance with other Banks and Financial Institutions-Outside Bangladesh (Nostro Account) as at 30 June 2016

Annexure-A

Name of the Bank and Financial Account Currency 30 June 2016 31 December 2015

Conversion

Conversion

Institutions type type FC amount Equivalent BDT FC amount Equivalent BDT rate rate

J.P. Morgan Chase Bank, New York CD USD 3,098,114.38 78.4000 242,892,167 2,334,386.54 78.5003 183,250,044

Citi Bank N.A. New York CD USD 4,464,762.44 78.4000 350,037,375 2,335,216.02 78.5003 183,315,158

HSBC Bank , New York CD - - - 6,399,474.06 78.5003 502,360,634

Standard Chartered Bank, London CD USD 153,098.11 78.4000 12,002,892 158,512.77 78.5003 12,443,300

Masreq Bank PSC, New York CD USD 2,094,015.13 78.4000 164,170,786 3,684,240.57 78.5003 289,213,990

Mashreq Bank, PSC, Mumbai, India CD USD 115,630.93 78.4000 9,065,465 370,168.75 78.5003 29,058,358

Standard Chartered Bank, New York CD USD 12,200,574.57 78.4000 956,525,046 734,817.55 78.5003 57,683,398

Wells Fargo Bank, New York CD USD 1,086,722.93 78.4000 85,199,078 2,014,574.61 78.5003 158,144,711

Sonali Bank, (UK) Limited CD USD 509,658.94 78.4000 39,957,261 174,973.40 78.5003 13,735,464

Standard Chartered Bank, Kolkata CD USD 648,531.63 78.4000 50,844,880 592,319.66 78.5003 46,497,271

AB Bank Ltd., Mumbai CD USD 841,091.35 78.4000 65,941,562 1,043,174.83 78.5003 81,889,537

NIB Bank Ltd, Karachi, Pakistan CD USD 493,781.81 78.4000 38,712,494 399,148.33 78.5003 31,333,264

National Trust Bank Ltd., Colombo CD USD 4,273.23 78.4000 335,021 2,119.65 78.5003 166,393

Nepal Bangladesh Bank Ltd., Kathmandu, Nepal CD USD 155,490.85 78.4000 12,190,483 148,879.10 78.5003 11,687,054

Sonali Bank, Kolkata CD USD 177,424.92 78.4000 13,910,114 201,021.92 78.5003 15,780,281

State Bank of India, Kolkata CD 0 - - - 61,597.97 78.5003 4,835,459

Bank of Bhutan, Phuentosoling CD USD 4,075.65 78.4000 319,531 1,075.65 78.5003 84,439

ICIC Bank Ltd.,Kalkata CD USD 814,318.03 78.4000 63,842,534 800,980.43 78.5003 62,877,204

Commerz Bank AG, Frankfurt CD USD 1,367,584.93 78.4000 107,218,659 865,137.13 78.5003 67,913,524

Habib American Bank, New York CD USD 614,166.99 78.4000 48,150,692 871,704.75 78.5003 68,429,084

J.P. Morgan Chase Bank, Sydney CD AUD 68,399.55 58.4198 3,995,888 70,113.80 57.2149 4,011,554

Habib Bank AG , Zurich CD CHF (642.07) 80.0245 (51,381) 4,882.43 79.5181 388,242

Commerz Bank AG,Frankfurt CD EUR 101,485.76 87.2200 8,851,588 354,138.27 85.8165 30,390,907

J.P. Morgan Chase Bank AG, Frankfurt CD EUR 51,865.07 87.2200 4,523,671 66,787.57 85.8165 5,731,476

Sonali Bank UK London CD EUR 9,119.17 87.2200 795,374 9,119.17 85.8165 782,575

Standard Chartered Bank,London CD GBP 437,824.84 105.2598 46,085,355 79,907.01 116.2864 9,292,099

Sonali Bank(UK)Limited CD GBP 14,786.72 105.2598 1,556,447 53,405.67 116.2864 6,210,353

Bank Of Tokyo- Mitsubishi,Tokyo CD JPY 1,354,914.00 0.7625 1,033,122 220,885.00 0.6515 143,907

AB Bank Ltd.,Mumbai CD EUR 9,930.70 87.2200 866,156 67,669.68 85.8165 5,807,175

Habib Bank UK, London CD GBP 2,600.00 105.2598 273,675 - - -

30,891,000.56 2,329,245,934 24,120,432.29 1,883,456,854

Page | 109

Other Investment - Shares and Debt Securities Annexure-B


Name of the Company

Face value No. of share Cost/share Cost price Mkt price/share Market value

Unquoted shares

Karma Sangsthan Bank 100 200,000 100.00 20,000,000 20,000,000

Central Depository Bangladesh Ltd. 10 2,284,722 10.00 22,847,220 22,847,220

EnergyPack Power Co. Ltd. 10 619,500 41.90 25,960,000 15.48 9,589,860

3,104,222 68,807,220 52,437,080 Quoted shares

National Housing Finance & Investment Ltd. 10 4,808,100 8.11 39,010,000 30.00 144,243,000

Power Grid Company Ltd. 10 3,984,250 69.13 275,412,488 58.10 231,484,925

Delta Life Insurance Company Ltd. 10 2,478,100 33.57 83,187,944 95.70 237,154,170

Summit Power Ltd. 10 2,332,265 46.64 108,786,696 33.90 79,063,784

Summit Alliance Port Ltd. 10 282,572 99.79 28,198,825 41.60 11,754,995

British American Tobacco Bangladesh 10 145,550 629.03 91,555,568 2,700.00 392,985,000

Eastland Insurance Company Ltd. 10 195,523 45.73 8,941,428 17.70 3,460,757

TITAS Gas Transmission and Distribution Ltd. 10 6,079,872 76.60 465,701,734 48.30 293,657,818

Beximco Ltd. 10 25,348,713 49.87 1,264,121,634 24.00 608,369,112

Malek Spinning Mills Company Ltd. 10 350 21.95 7,681 16.90 5,915

Unique Hotel and Resorts Ltd. 10 200,000 105.15 21,029,385 46.70 9,340,000

The City Bank Ltd. 10 5,520,349 35.18 194,197,477 24.00 132,488,376

MJL Bangladesh Ltd. 10 92,252 92.99 8,578,577 96.30 8,883,868

Fareast Life Insurance Ltd. 10 910,071 150.13 136,631,812 68.60 62,430,871

Beximco Pharmaceuticals Ltd. 10 424,246 58.03 24,619,620 83.50 35,424,541

Northern General Insurance Company Ltd. 10 271,798 40.29 10,951,563 14.90 4,049,790

Reliance insurance Ltd. 10 215,811 54.10 11,674,463 43.00 9,279,873

53,289,822 2,772,606,895 3,443 2,264,076,795

Mutual funds

IFIC Bank 1st Mutual Fund 10 31,912,222 7.83 250,000,000 4.80 153,178,694

ICB Employee 1st Mutual Fund 10 1,339,500 13.43 17,986,473 6.50 8,706,750

33,251,722 267,986,473 161,885,444

Outside Bangladesh

Nepal Bangladesh Bank Ltd. 12,433,412 103.38 1,285,345,324 444.60 5,527,908,701

Oman International Exchange LLC 2,948 6,044.94 17,820,477 17,820,477

NIB Bank Ltd, Pakistan 24,578,800 13.55 333,012,688 1.35 33,128,290

37,015,160 1,636,178,489 5,578,857,468

Total other investment 4,745,579,077 8,637,254,393

Page | 110

Loans and advances allowed to each customer exceeding 10% of Bank's total capital Annexure-C

as at 30 June 2016

Million BDT

Sl. Name of the

Name of Clients Outstanding as on 30 June 2016 Amount

Group Funded Non-funded

Total classified

Soiltech International Ltd. 1,468.60 129.60 1,598.20 -

1 Soiltech Group Wahidunnabi 44.40 - 44.40 -

Ace-Swee Hong Joint Venture 130.80 -

130.80 -

Soiltech International & IJM 55.70 - 55.70 -

Sub Total: 1,699.50 129.60 1,829.10 -

New Age Fashionwear Ltd. 51.10 119.30 170.40 -

2 Newage Group Newage Garments Ltd. 358.70 231.70 590.40 -

Newage Apparels Ltd. 103.50 938.50

1,042.00 -

Keilock Newage BD. Ltd. 125.20 332.00 457.20 -

Sub Total: 638.50 1,621.50 2,260.00 -

3 Islam Garments Islam Garments Ltd. 973.20 2,012.00 2,985.20 - Islam Knit Designs Ltd. 18.40 597.30 615.70

Sub Total: 991.60 2,609.30 3,600.90 -

4 Wisdom Wisdom Attires Ltd. 1,760.60 429.30 2,189.90 -

Sub Total: 1,760.60 429.30 2,189.90 -

5 Banglalion Communication Ltd. 1,972.70 - 1,972.70 -

Sub Total: 1,972.70 - 1,972.70 - Knit Concern Ltd. 223.00 1,338.10 1,561.10 - K.C. Apparels Ltd. 257.90 325.60 583.50 -

6 Knit Concern Pack Concern Ltd. 32.70 15.70 48.40 -

K.C. Lingerie Ltd. - 107.70 107.70

Zas Concern Ltd. - 3.20 3.20 -

Sub Total: 513.60 1,790.30 2,303.90 -

Uttara Jute Fibres & Inds. Ltd. 1,747.80 37.60 1,785.40 -

7 Uttara Uttara Traders (PVT.) Ltd. 223.30 80.00 303.30 -

Uttara Acrylic Mills Ltd 215.10 16.40

231.50 -

Uttara Spinning Mills Ltd 89.80 22.00 111.80 -

Sub Total: 2,276.00 156.00 2,432.00 - Cassiopea Apparels Ltd. 632.40 1,037.00 1,669.40 -

8 Cassiopea Cassiopea Fashion Ltd. 60.30 14.20 74.50 -

Elegant Washing Plant Ltd. - 10.50 10.50 -

Sub Total: 692.70 1,061.70 1,754.40 -

9 Silver Line Silver Line Composite Textile Mill Ltd. 625.70 578.00 1,203.70 - Silver Composite Textile Mills Ltd. 1,563.10 920.20

2,483.30 -

Sub Total: 2,188.80 1,498.20 3,687.00 -

10 IFIC IFIC Secureties Ltd 1,263.60 450.00 1,713.60 -

Sub Total: 1,263.60 450.00 1,713.60 - 11 Scholasitca Scholastica Limited 1,774.80 - 1,774.80 -

Sub Total: 1,774.80 - 1,774.80 -

12 Sikder Powerpac Mutiara Keraniganj Power Plant Ltd. 1,793.90 - 1,793.90 - R & R Holdings 1,687.70 -

1,687.70 -

Sub Total: 3,481.60 - 3,481.60 -

13 Jamuna Jamuna Builders Ltd. 1,649.70 - 1,649.70 -

Sub Total: 1,649.70 - 1,649.70 - ENA Properties Ltd. 1,446.20 65.90 1,512.10 -

14 ENA ENA DDJ Construction Firm - 544.50 544.50 -

Northern Power Solutions Ltd. 1,673.80 111.00 1,784.80 -

Sub Total: 3,120.00 721.40 3,841.40 -

15 Bangladesh Rural Advancement Committee (BRAC) 1,682.80 - 1,682.80 -

Sub Total: 1,682.80 - 1,682.80 -

Page | 111

Sl. Name of the

Name of Clients Outstanding as on 30 June 2016 Amount

Group Funded Non-funded Total classified

16 SQ Celsius Ltd. 1,658.70 827.80 2,486.50 -

Sub Total: 1,658.70 827.80 2,486.50 -

17 Pacific Bangladesh Teleco 1,791.70 - 1,791.70 -

Sub Total: 1,791.70 - 1,791.70 -

18 Dohatec Newmedia 559.60 169.70 729.30 -

Global Voice Telecom Limited 1,126.20 2,496.10 3,622.30 -

Sub Total: 1,685.80 2,665.80 4,351.60 -

19 Appollo Ispat Complex Ltd. 1,523.40 121.40 1,644.80 -

Sub Total: 1,523.40 121.40 1,644.80 -

20 Buyer Media Limited 1,886.80 13.80 1,900.60 -

Sub Total: 1,886.80 13.80 1,900.60 -

21 Avalon Aviation Ltd. 341.00 - 341.00 -

Foster Trading International Ltd. 1,320.60 110.00 1,430.60 -

Sub Total: 1,661.60 110.00 1,771.60 -

22 Prisma Digital Network Ltd. 1,676.20 107.30 1,783.50 -

Sub Total: 1,676.20 107.30 1,783.50 -

23 Rupayan Housing Estate Ltd. 1,749.00 17.60 1,766.60 -

Sub Total: 1,749.00 17.60 1,766.60 -

24 Global LPG Ltd. 1,687.90 733.60 2,421.50 -

Sub Total: 1,687.90 733.60 2,421.50 -

Grand Total: 41,027.60 15,064.60 56,092.20 -

Page | 112

Schedule of fixed assets including premises, furniture and fixture Annexure - D as at 30 June 2016

Cost Depreciation

Written down

Particulars Balance as at 1 Addition during Disposal during Balance as at 30 Rate % Balance as at 1 Charged during Disposal during Balance as at 30 value as at 30

January 2016 the period the period June 2016 January 2016 the period the period June 2016 June 2016

Land 475,118,759 - - 475,118,759 - - - - - 475,118,759

Buildings and premises 1,337,951,477 - - 1,337,951,477 2.5 192,827,022 14,314,056 - 207,141,078 1,130,810,400

Wooden furniture 118,694,149 3,847,693 1,167,656 121,374,186 20 73,133,162 4,772,783 843,142 77,062,804 44,311,382

Steel furniture 59,242,462 2,830,582 200,149 61,872,895 10 33,720,678 1,363,388 134,956 34,949,111 26,923,784

Computer equipment 668,481,187 41,431,108 139,200 709,773,095 30 458,926,481 34,317,994 127,786 493,116,689 216,656,406

Office equipment 196,964,697 6,200,700 427,611 202,737,786 20 136,914,295 6,487,129 422,174 142,979,250 59,758,537

Electrical & gas equipment 394,944,685 23,391,578 1,921,243 416,415,019 20 248,261,436 16,168,834 1,144,030 263,286,240 153,128,779

Leasehold improvement 237,653,741 19,723,334 3,560,775 253,816,300 20 135,509,829 11,195,729 2,400,524 144,305,035 109,511,265

Vehicles 115,673,145 - 60,000 115,613,145 20 72,471,645 4,319,345 51,947 76,739,042 38,874,103

Leased vehicles 47,600,000 - - 47,600,000 - 9,626,762 3,054,249 - 12,681,011 34,918,989

Soft furnishing 12,653,637 433,345 883,599 12,203,383 40 11,050,029 361,366 813,756 10,597,639 1,605,744

Intangible asset:

Software 293,931,990 1,635,732 - 295,567,722 30 202,696,439 13,875,068 - 216,571,507 78,996,215

3,958,909,929 99,494,072 8,360,233 4,050,043,767 1,575,137,777 110,229,943 5,938,315 1,679,429,405 2,370,614,363

*Capital work in progress 846,594,774 349,491,067 1,196,085,840 - - - - 1,196,085,840

Total 4,805,504,702 448,985,139 8,360,233 5,246,129,608 1,575,137,777 110,229,943 5,938,315 1,679,429,405 3,566,700,203

Cost

Depreciation

Written down

Particulars Balance as at 1 Addition during Disposal during Balance as at 31 Rate % Balance as at 1 Charged during Disposal during Balance as at 31 value as at 31

January 2015 the year the year December 2015 January 2015 the year the year December 2015 December 2015

Land 475,118,759 - - 475,118,759 - - - 475,118,759

Buildings and premises 1,337,951,477 - - 1,337,951,477 2.5 163,464,856 29,362,166 - 192,827,022 1,145,124,455

Wooden Furniture 113,437,784 8,484,809 3,228,445 118,694,149 20 64,234,923 11,390,252 2,492,013 73,133,162 45,560,986

Steel Furniture 56,029,936 4,027,173 814,647 59,242,462 10 31,504,309 2,835,755 619,385 33,720,678 25,521,783

Computer Equipment 536,742,251 144,354,864 12,615,928 668,481,187 30 381,042,836 89,809,162 11,925,517 458,926,481 209,554,707

Office Equipment 185,752,840 14,943,890 3,732,033 196,964,697 20 125,401,989 15,012,602 3,500,296 136,914,295 60,050,403

Electrical & Gas Equipment 356,015,849 51,438,612 12,509,776 394,944,685 20 221,389,145 36,670,812 9,798,521 248,261,436 146,683,249

Leasehold improvement 215,850,139 24,030,848 2,227,246 237,653,741 20 111,797,341 25,535,978 1,823,490 135,509,829 102,143,913

Vehicles 99,146,620 16,526,525 - 115,673,145 20 61,671,269 10,800,375 - 72,471,644 43,201,501

Leased vehicles 47,600,000 - - 47,600,000 - 5,516,629 4,110,132 9,626,761 37,973,239

Soft Furnishing 12,271,161 469,323 86,847 12,653,637 40 10,060,836 1,069,072 79,878 11,050,030 1,603,607

Intangible asset: -

Software 240,470,209 54,083,031 621,250 293,931,990 30 164,181,673 39,100,951 586,185 202,696,439 91,235,551

3,676,387,025 318,359,074 35,836,170 3,958,909,929 1,340,265,806 265,697,257 30,825,286 1,575,137,777 2,383,772,152

*Capital work in progress 593,198,539 420,232,987 166,836,752 846,594,774 - - - - 846,594,774

Total 4,269,585,564 738,592,061 202,672,922 4,805,504,702 1,340,265,806 265,697,257 30,825,286 1,575,137,777 3,230,366,926 *Capital work in progress represents the amount paid for procuring material & equipment for under constructed IFIC Bank Tower and upgradation of core banking software-MISYS.

Page | 113

Annexure -E

Computation of Risk Weighted Assets

Solo Basis

as at 30 June 2016

1.0 Risk Weighted Assets for Credit Risk Balance Sheet Exposures BDT in Million

Sl. Exposure Type Rating Risk Weight Exposure RWA

1 2 3 4 5 6 = (4x5)

a. Cash 0 1,640.66 -

b.

Claims on Bangladesh Government (other than 0

25,548.93

-

PSEs) and Bangladesh Bank

c. Claims on other Sovereigns & Central Banks 0.5 - -

Claims on Bank for International Settlements,

d. International Monetary Fund and European 0 - -

Central Bank

e. Claims on Multilaterl Development Banks (MDBs): -

i) IBRD, IFC, ADB, AfDB, EBRD, IADB, EIB, EIF, 0

-

-

NIB, CDB, IDB, CEDB

ii) Others MDBs 1 0.20 - -

2,3 0.50 - -

4,5 1.00 - -

6 1.50 - -

Unrated 0.50 - -

f. Claims on Public Sector Entities (other than 1 0.20 - -

Government) in Bangladesh 2,3 0.50 - -

4,5 1.00 - -

6 1.50 - -

Unrated 0.50 20.00 10.00

g.Claims on Banks and NBFIs -

i) Maturity over 3 months 1 0.20 2,111.73 422.35

2,3 0.50 228.37 114.19

4,5 1.00 - -

6 1.50 - -

Unrated 1.00 88.47 88.47

ii) Maturity less than 3 months 0.20 12,657.82 2,531.56

h. Claims on Corporate (excluding equity exposure) 1 0.20 4,967.87 993.57

2 0.50 11,285.96 5,642.98 3,4 1.00 7,109.31 7,109.31

5,6 1.50 - -

Unrated 1.25 16,494.30 20,617.88

h(1) Claims on SME SME 1 0.20 0.00 0.00

SME 2 0.40 13.86 5.54

SME 3 0.60 342.53 205.52

SME 4 0.80 135.96 108.76

SME 5 1.20 - -

SME 6 1.50 - - Unrated (small

0.75

2,286.55

1,714.91

enterprise & <BDT

Unrated (small

enterprise having ≥ 1.00 10,731.59 10,731.59

BDT 3m & Medium

Page | 114

Sl.

Exposure Type

Rating Risk Weight

Exposure

RWA

i. Claims under Credit Risk Mitigation PSE - -

Banks & NBFIs - -

Corporate 10,135.56 6,020.63

Retail 551.33 1.10

SME 2,473.93 468.27

Consumer finance 2,097.72 11.58

Residential property 171.10 55.18

Commercial real estate 87.11 81.87

j.

Claims categorized as retail portfolio (excluding SME, 0.75

251.47

188.60

Consumer Finance and Staff loan) upto 1 crore

k. Consumer finance 1.00 740.48 740.48

l. Claims fully secured by residential property 0.50 24,355.59 12,177.79

m. Claims fully secured by Commercial real estate 1.00 6,274.04 6,274.04

1. Past Due Claims that is past due for 60 days or more n. (Risk weights are to be assigned net of specific provision): -

i) Where specific provisions are less than 20 percent of the 1.50

6,204.80

9,307.20

outstanding amount of the past due claim

ii) Where specific provisions are no less than 20 percent of 1.00

3,098.50

3,098.50

the outstanding amount of the past due claim

iii) Where specific provisions are more than 50 percent of 0.50

892.20

446.10

the outstanding amount of the past due claim

2. Claims fully secured against residential property that are

past due for more than 60 days and/or impaired and specific 1.00

154.40

154.40

provision held there-against is less than 20% of outstanding

amount 3. Loans and claims fully secured against residential

property that are past due for more than 60 days and/or 0.75

11.50

8.63

impaired and specific provision held there-against is no less

than 20% of outstanding amount

o. Capital Market Exposure 1.25 1,263.64 1,579.55

Investment in equity and other regulatory capital

instruements issued by other banks and merchant

p. Banks/Brokerage Houses/Exchange Houses which are not 1.25 898.20 1,122.75 listed in the Stock Exchanges (other than those deducted

from capital) held in banking book

q. Invetments in venture capital 1.50 - -

r.

Investments in premises, plant and equipment and all other 1.00

3,566.70

3,566.70

fixed assets

s. Claims on all fixed assets under operating lease 1.00 465.24 465.24

t. All other assets - -

i) Claims on GoB & BB 0.00 2,934.56 -

ii) Staff loan/Investment 0.20 1,939.88 387.98

iii) Cash items in Process of Collection 0.20 - -

iv) Claims on Off-shore Banking Units (OBU) 1.00 1,578.96 1,578.96

v) Other assets (net off specific provision, if any) 1.00 2,707.26 2,707.26

Sub-Total 168,518.06 100,739.43

Page | 115

2.0 Risk Weighted Amount for Credit Risk Off-Balance Sheet Exposures BDT in Million

Sl. Exposure Type BB's Rating Grade* Risk Weight Exposure Risk Weighted

No. Asset

1 2 3 4 5 6 = (4x5)

a) Claims on Bangladesh Government and 0

Bangladesh Bank

b) Claims on other Sovereigns & Central Banks*

c) Claims on Bank for International Settlements,

International Monetary Fund and European 0

Central Bank

d) Claims on Multilaterl Development Banks (MDBs):

i) IBRD, IFC, ADB, AFDB, EBRD, IADB, EIB, EIF, 0

NIB, CDB, IDB, CEDB

ii) Others MDBs 1 0.20

2,3 0.50

4,5 1.00

6 1.50

Unrated 0.50

e) Claims on Public Sector Entities (other than 1 0.20

Government) in Bangladesh 2,3 0.50

4,5 1.00

6 1.50

Unrated 0.50

f) Claims on Banks & NBFIs

i) Maturity over 3 months 1 0.20

2,3 0.50

4,5 1.00

6 1.50

Unrated 0.50

ii) Maturity less than 3 months 0.20

g) Claims on Corporate (excluding equity exposure) 1 0.20 2,032.05 406.41

2 0.50 4,817.75 2,408.87

3,4 1.00 1,948.62 1,948.62

5,6 1.50 - -

Unrated 1.25 7,836.36 9,795.45

h) Claims under retail exposure 0.75 94.08 70.56

h(1) 1 0.20 0.03 0.01

2 0.40 399.07 159.63

3 0.60 18.85 11.31

4 0.80 1.64 1.31

5 1.20 - -

6 1.50 - -

Claims under SME Credit Rating-wise exposure Unrated (small 0.75 66.86 enterprise & <BDT

3.00m) 50.15

Unrated (small 1.00 2,010.78 enterprise having ≥

BDT 3.00m &

Medium enterprise) 2,010.78

i) Consumer Loan 1.00

j) Claims fully secured by residential property 0.50

k.) Claims fully secured by commercial real estate 1.00

l) Investments in venture capital 1.50

m) All other assets 1.00

Sub-Total 19,226.09 16,863.09

Page | 116

3.0 Capital Charge for Market Risk (Balance Sheet Exposures)

Sl.

Capital

Risk

Market Risk

Risk Weight

Weighted

No.

Charge

Asset

a Interest Rate Related Instruments 10.50 10.00 104.98

b Equities 608.12 10.00 6,081.19

c Foreign Exchange Position 94.96 10.00 949.56

d Commodities - 10.00 -

Sub-Total 713.57 7,135.72

4.0 Capital Charge for Operational Risk (Basic Indicator Approach)

Risk

Sl.

Capital

Operational Risk

Risk Weight

Weighted

No.

Charge

Asset

a Gross Income 1,107.82 10.00 11,078.16

Sub-Total 1,107.82 10.00 11,078.16

Grand Total Risk Weighted Assets 135,816.40

Page | 117

Related party disclosures Annexure -F

Name of Directors and their interest in different

entities as at 30 June 2016 Sl

Name Status with the Bank Status with interested

Name of the firms/companies in which they have interest No. entities

1 Mr. Salman F Rahman Chairman Chairman GMG Airlines Limited Chairman Abahani Limited

Vice Chairman Bangladesh Export Import Co. Ltd.

Vice Chairman Beximco Pharmaceuticals Ltd.

Vice Chairman Beximco Synthetics Ltd.

Vice Chairman Shinepukur Ceramics Ltd.

Vice Chairman Independent Television Ltd.

Vice Chairman Beximco Holdings Ltd.

Vice Chairman Beximco Computers Ltd.

Vice Chairman Beximco Engineering Ltd.

Vice Chairman Beximco Media Ltd.

Vice Chairman Beximco Pharma Center for Bio & Industrial Research Ltd.

Vice Chairman Beximco Fashions Ltd.

Vice Chairman Beximco Property Development and Management Ltd.

Vice Chairman RR Washing Ltd.

Vice Chairman International Knitwear and Apparels Ltd.

Vice Chairman Crescent Fashion and Design Ltd.

Vice Chairman Esses Fashions Ltd.

Vice Chairman Crescent Accessories Ltd.

Vice Chairman Sonali Ansh Limited

Vice Chairman Esses Exporters Ltd.

Vice Chairman Beximco Power Company Ltd.

Shareholder Beximco Communications Ltd.

Shareholder I & I Services Ltd.

Shareholder Beximco Pertroleum Limited

2 Mr. Monirul Islam Independent Director Chairman IFIC Securities Ltd. (Nominated by IFIC Bank Ltd.)

Director IFIC Money Transfer (UK) Ltd. (Nominated by IFIC Bank Ltd.)

Director Nepal Bangladesh Bank Ltd., Nepal (Nominated by IFIC Bank Ltd.)

Chairman Monir Associates Ltd.

Managing Director Aaron Label Ltd.

Managing Director Cosmo Sizing & Weaving Mills Ltd.

3 Mr. Anwaruzzaman Independent Director Director IFIC Money Transfer (UK) Ltd.

Chowdhury (Nominated by IFIC Bank Ltd.)

Director IFIC Securities Ltd. (Nominated by IFIC Bank Ltd.)

Chairman Weavers Community Trust

Chairman Kipling

General Secretary Tower Hamlet Homeless Family Campaign

Youth & Community Worker Sabuj Sathi

4 Mr. Jalal Ahmed Govt. nominated Chairman Nepal Bangladesh Bank Ltd., Nepal

Director (Nominated by IFIC Bank Ltd.)

Chairman IFIC Money Transfer (UK) Ltd. (Nominated by IFIC Bank Ltd.)


Additional Secretary Finance Division, Ministry of Finance, Bangladesh Secretariat, Dhaka.

Director Bangladesh Telecommunication Co. Ltd.

Director Bangladesh Services Ltd.

Director British American Tobacco Bangladesh Co. Ltd.

Director Bangladesh Submarine Cable Co. Ltd.

Page | 118

5 Mr. A. R. M. Nazmus Sakib** Govt. nominated Director Oman International Exchange LLC

Director (Nominated by IFIC Bank Ltd.)


Additional Secretary Finance Division, Ministry of Finance, Bangladesh Secretariat, Dhaka.

6 Ms. Quamrun Nahar Ahmed Govt. nominated Additional Secretary

Bank and Financial Institutions Division, Ministry of Finance, Director Bangladesh Secretariat, Dhaka.

7 Mr. M. Shah Alam Sarwar Managing Director Director Grameen Bank (Nominated by Govt. of

Bangladesh)

Director Nepal Bangladesh Bank Ltd., Nepal (Nominated by IFIC Bank Ltd.)

Director Oman International Exchange LLC (Nominated by IFIC Bank Ltd.)



Related party transactions i) Significant contracts with the Bank wherein Directors have interest during the year is nil.

ii) Share issued to Directors and Executive without consideration or exercisable at a discount is nil. iii) The details of the related party transactions are as follows: Amount in BDT

Name of the Party

Relationship

Nature of Facilities

31-Dec-15 Transactions

30-Jun-16

Debit Credit

Loan 1,295,368,172 - 31,602,120 1,263,766,052

IFIC Securities Limited

Subsidiary

Current & SND Account 6,464,715 - 73,355,054 79,819,769

BO Account 1,438,193 8,023,100 - 9,461,293

iv) Lending policies in respect of related party

The Bank approved loans to related parties in compliance with BRPD circular no. 04 dated 23 February 2014 and as per requirement of section 27(1) of Bank Company Act 1991 as amended.

v) Business other than banking business with any related concern of the Directors as per section 18(2) of Bank Companies Act 1991

Bank has executed maintenance agreement with Beximco Computers Limited for maintenance of different application software and back up link data centre, for which paid BDT 25,000 and Bangladesh Export Import Co. Limited for Broadband Internet Service paid BDT 6,34,800 from 1 January to 30 June 2016.

vi) Investment in the securities of Director and their related concern

Investee Entity Related Director Relation with the Bank Relation with Investee Entity Investment at Cost (BDT)

Beximco Ltd Mr. Salman F Rahman Chairman Vice Chairman 1,264,121,634

Beximco

Pharmaceuticals Mr. Salman F Rahman Chairman Vice Chairman 24,619,620 Ltd,

Page | 119

Disclosure on Audit Committee of the Bank Annexure -G

a) Particulars of members of the Audit Committee

Sl. Name Status with the Bank Status Educational Qualification

1 Mr. Monirul Islam Independent Director Chairman B. A (Hons), M. A.

2 Mr. Anwaruzzaman Chowdhury Independent Director Member MBA

3 Mr. Jalal Ahmed Director Member B. S. S (Hons), M. S. S. in Public Administration

b) Particulars of meetings held by the Audit Committee during the period from 01 January to 30 June 2016

Sl. Meeting No Meeting held on

1 97th Audit Committee Meeting 12.01.2016




5 101st Audit Committee Meeting 10.05.2016

6 102nd Audit Committee Meeting 19.06.2016 Evaluation of the Audit Committee regarding strengthening of Internal Control System

The Internal Control & Compliance Division (ICCD) of the Bank reviews the Internal Control System of the Bank and ensures that internal controls are considered properly managed and supervised throughout all Divisions and Branches of the Bank.

As per guideline of Bangladesh Bank, the Audit committee, in the meetings held during the half year ended 30 June 2016, with various issues/reports/findings on financial reporting process, the system of internal control, the audit process, and the process for monitoring compliance with laws and regulations and its own code of business conduct – submitted by ICCD, have reviewed and evaluated.

The Committee has considered and reviewed various reports relating to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of Bangladesh Bank and other regulatory authorities.

During discussion on some memo(s) and Compliance Report, the Committee has advised Management to devise a system for arresting

occurrence of the irregularities on recurring basis and ICCD of the Bank has also been advised to take necessary steps for rectification

of all irregularities as mentioned in the memo(s)/reports at the earliest. The Committee has also advised the Head of ICC to formulate

matrix/format to monitor status of compliance on regular basis and devise some innovative tools/system for reducing number of

irregularities in the Branches as well as enabling them to monitor up-to-date status of compliance. All Audited/Un-audited yearly/quarterly Financial Statements submitted during half year ended 30 June 2016 have been explained and endorsed to the Audit Committee whether the statements reflect the complete and concrete information and whether the statements are prepared according to existing rules & regulations and standards enforced in the country and as per relevant prescribed accounting

standards set by Bangladesh Bank. The Committee has submitted compliance report to the Board on quarterly basis during half year ended 30 June 2016 regarding compliance of recommendations made in internal and external audit reports and the Bangladesh Bank inspection reports.

Page | 120

Annexure -H

Financial highlights of the Bank

as at and for the year ended 30 June 2016

Amount in BDT

Sl. Particulars June 2016 Dec 2015

1 Paid up capital 5,034,124,170 5,034,124,170

2 Total capital 15,824,141,747 11,813,122,670

3 Capital surplus 1,393,649,204 81,680,171

4 Total assets 189,353,599,687 178,333,951,390

5 Total deposits 153,584,566,933 146,819,705,532

6 Total loan & advances 129,356,565,436 123,268,667,873

7 Total contingent liabilities & commitments 54,021,989,160 47,779,027,775

8 Credit deposit ratio 84.22% 83.96%

9 Percentage of classified loan against total loans & advances 7.84% 6.46%

10 Profit after tax & provision 659,293,604 886,981,027

11 Amount of classified loans 10,141,608,181 7,962,051,830

12 Provision kept against classified loans 3,300,211,628 2,699,917,003

13 Provision surplus/deficit - 4,417,597

14 Cost of fund 5.28% 6.16%

15 Interest earning assets 159,476,947,951 151,498,806,527

16 Non-interest earning assets 29,876,651,736 26,835,144,863

17 Return on Investment (ROI) 7.37% 6.48%

18 Return on Assets (ROA) 0.72% 0.53%

19 Income from investment 1,087,500,243 2,375,204,608

20 Earnings per share 1.31 1.76

21 Net income per share 1.31 1.76

22 Net Asset Value (NAV) 12,274,754,506 11,654,213,295

23 Net Asset Value (NAV) per share 24.38 23.15

24 Net Operating Cash Flow Per Share (NOCFPS) 5.43 (3.42)

25 Price earning ratio (Times) 12.14 12.03

Page | 121

Consolidated Segment Reporting Annexure-I for the half year ended 30 June 2016

A. Segmental operating profit and loss BDT in Million

SME/Agri and

Treasury and

Particulars Corporate Retail Money Market IFICSL Others Consolidated Green

Operations

Interest income 4,126.94 804.15 1,137.94 67.92 51.98 46.15 6,235.09

Interest expense 2,658.62 539.72 799.59 88.11 20.04 40.19 4,146.26

Net interest income 1,468.32 264.43 338.36 (20.19) 31.95 5.97 2,088.83

Income from Investment - - - 1,087.50 7.28 - 1,094.78 Commission, exchange, brokerage, etc. 200.39 54.42 74.02 353.10 24.07 69.73 775.73

Other operating income 136.95 30.43 45.65 57.82 0.06 33.48 304.40

Total operating income 1,805.66 349.28 458.03 1,478.24 63.36 109.18 4,263.75

Operating expenses 1,051.51 248.35 296.61 499.30 17.68 53.55 2,167.00

Operating profit/(loss) 754.15 100.93 161.42 978.93 45.68 55.64 2,096.74

There are 8 (eight) operating segments including subsidiaries as on 30 June 2016. Out of 8 (eight) operating segments only 5 (five) are reportable as per latest evaluation in accordance with BFRS 8: Operating segments. Hence other non-reportable segments have been shown under 'Others'.

B. Segmental assets and liabilities The necessary information regarding assets and liabilities of operating segments (excluding subsidiaries) are not separable and individually identifiable and so the assets and liabilities of the respective segments have not been presented here.

Page | 122

Annexure - J

Disclosure of Restructured Loan for the as at/for the half year ended 30 June 2016

BDT in Million

Down Payment Outstanding Amount Total Provision

Due Date of

Sl.

Type of Date of At the time New/Fresh

Outstanding

Present Name of the Borrower

1st

of taking

Disbursement

No. Loan restructure

Status Required Realized

as at 30 June Required Maintained

Installment

NOC from

amount after

2016

BB

NOC

1 Power Pac - Mutiara KPP Plant Ltd. TL (O) 07.12.2015 16.90 16.90 07.03.2017 1,546.10 Nil 1,793.90 35.88 35.88 SMA(RST)

2 M/s R&R Holdings TL (O)-1 07.12.2015 8.20 8.20 07.03.2017 746.00 Nil 871.45 17.43 17.43 SMA(RST)

3 M/s R&R Holdings TL (O)-2 07.12.2015 7.70 7.70 07.03.2017 702.00 Nil 816.21 16.32 16.32 SMA(RST)

4 Jamuna Builders Ltd. TL (I)-1 14.12.2015 14.20 14.30 21.07.2016 1,546.20 Nil 1,635.95 32.72 32.72 SMA(RST)

5 Jamuna Builders Ltd. TL (O)-2 14.12.2015 0.10 0.10 21.07.2016 13.00 Nil 13.80 0.28 0.28 SMA(RST)

Total 47.10 47.20 4,553.30 5,131.31 102.63 102.63

`

Page | 123

Annexure-K

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED

Off-shore Banking Unit

Balance Sheet

as at 30 June 2016


USD Taka

USD Taka

PROPERTY AND ASSETS

Cash - - - -

Cash in hand (including foreign currency) - - - -

Balance with Bangladesh Bank and its agent Bank(s) (including

foreign currency) - - - -

Balance with other banks and financial institutions - - - -

In Bangladesh - - - - Outside Bangladesh - - - -

Money at call and on short notice - - - -

Investments - - - -

Government securities - - - -

Other investments - - - -

Loans and advances 3 19,306,464 1,513,626,799 24,161,133 1,896,656,202

Loans, cash credits, overdrafts etc. 3.1 8,371,019 656,287,919 9,469,692 743,373,693 Bills purchased and discounted 3.2 10,935,445 857,338,880 14,691,441 1,153,282,509

Fixed assets including premises, furniture and fixtures - - - -

Other assets 4 912,834 71,566,220 1,856,442 145,731,263

Non banking assets - - - -

Total assets 20,219,299 1,585,193,019 26,017,575 2,042,387,464


Borrowing from other banks, financial Institutions and 5 20,139,752 1,578,956,587 25,386,327 1,992,834,279

agents

Deposit and other accounts - - - -

Current deposits and other accounts - - - -

Bills payable - - - -

Savings bank deposits - - - -

Fixed Deposits - - - -

Bearer Certificate of Deposit - - - -

Other Deposits - - - -

Other liabilities 6 - - 524,561 41,178,214

Total liabilities 20,139,752 1,578,956,587 25,910,888 2,034,012,493

Capital / Shareholders' equity Paid up capital - - - -

Statutory reserve - - - -

General Reserve - - - -

Revaluation reserve against securities - - - -

Revaluation reserve against fixed assets - - - -

Reserve against non banking assets - - - -

Foreign currency translation gain/(loss) - - - -

Surplus in profit and loss account 7 79,546 6,236,432 106,687 8,374,971

Total shareholders' equity 79,546 6,236,432 106,687 8,374,971

Total liabilities and shareholders' equity 20,219,299 1,585,193,019 26,017,575 2,042,387,464

Page | 124

OFF BALANCE SHEET ITEMS Contingent liabilities - - - -

Acceptances and endorsements - - - -

Letters of guarantee - - - -

Irrevocable letters of credit

Bills for collection - - - -

Other contingent liabilites - - - -

Other Commitments

Documents credit and short term trade -related transactions - - - -

Forward assets purchased and forward deposit placed - - - -

Undrawn note issuance and revolving undwerwriting facilities - - - -

Undrawn formal standby facilities, credit lines and other commitments - - - -

Total off-Balance Sheet exposures including contingent liabilites - - - -

These financial statements should be read in conjunction with the annexed notes.

Page | 125

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Off-shore Banking Unit Profit and Loss Account


Particulars Note 30 June 2016 30 June 2015

USD Taka USD Taka

Interest income 8 588,704 46,154,418 623,488 48,507,416

Interest paid on deposits, borrowings etc. 9 512,568 40,185,330 567,890 44,181,875

Net interest income 76,136 5,969,088 55,598 4,325,541

Investment Income - - - -

Commission, exchange and brokerage - - - -

Other operating income 3,410 267,344 - -

Total operating income 79,546 6,236,432 55,598 4,325,541

Salaries and allowances - - - -

Rent, taxes, insurance, electricity etc. - - - -

Legal expenses - - - -

Postage, stamp, telecommunication etc. - - - -

Stationery, printing, advertisement etc - - - -

Managing Director's salary - - - - Directors' fees - - - -

Auditors' fee - - - -

Charges on loan loss - - - -

Depriciation and repair of bank's assets - - - -

Other expenses - - - -

Total operating expenses - - - -

Profit/(Loss) before provision 79,546 6,236,432 55,598 4,325,541

Provision for loans, investments and other assets

Specific Provision - - - -

General Provision - - - -

Provision for off-balance sheet exposures - - - -

Provision for diminution in value of investments - - - -

Provision for other assets - - - -

Total provision - - - -

Profit/(Loss) before taxes 79,546 6,236,432 55,598 4,325,541


Page | 126

INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Off-shore Banking Unit Cash Flow Statement


Note 30 June 2016 30 June 2015 USD Taka USD Taka

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received in cash 588,704 46,154,418 623,488 48,507,416

Interest payments (512,568) (40,185,330) (567,890) (44,181,875)

Dividend received - - - -

Fees and commission received in cash - - - -

Recovery of loans and advances in cash previously written-off - - - -

Cash paid to employees - - - -

Income tax paid - - - -

Cash received from other operating activities 3,410 267,344 - -

Cash paid for other operating activities (106,687) (8,374,971) (240,653) (18,758,773)

Cash flows before charges in operating assets and liabilities (27,141) (2,138,539) (185,055) (14,433,232)

Increase / Decrease in operating assets and liabilities Loans and advances to customers 4,854,669 383,029,403 1,349,877 108,402,879

Other assets 943,608 74,165,043 (481,210) (37,309,532)

Borrowing from banks (5,246,575) (413,877,692) (213,233) (19,994,318)

Deposits from other banks

Deposit from customers - - - -

Other Liabilities (524,561) (41,178,214) (470,379) (36,665,797)

27,141 2,138,539 185,055 14,433,232

Net cash from operating activities - - - -

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of securities - - - -

Cash payments for purchase of securities - - - -

Purchase/ Sale of property, Plant & equipment of fixed assets - - - -

Sales of fixed assets - - - -

Net cash from investing activities - - - -

CASH FLOWS FROM FINANCING ACTIVITIES

Received from issue of loan, capital and debts security - - - -

Net Cash from Financing activities - - - -

Net increase/(decrease) in cash and cash equivalent - - - -

Opening cash and cash equivalent - - - -

Closing cash and cash equivalent - - - -


Page | 127

Off-Shore Banking Unit Notes to the Financial Statements for

the half year ended 30 June 2016 1.1 Status of the unit

Off-shore Banking Units of IFIC Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank obtained the Off-shore

Banking Unit permission from Bangladesh Bank vide letter no. BRPD (P-3) 744 (104)/2009-4233 dated 17 November 2009. The Bank

commenced the operation of its Off-shore Banking Unit from May 06, 2010. Presently the Bank has 1 (one) unit in Dhaka. 1.1.1 Principal activities

The principal activities of the unit is to provide all kinds of commercial banking services to its customers through its off-shore Banking Units in Bangladesh.

1.2 Significant accounting policies and basis of preparation of financial statements 1.2.1 Basis of accounting

The Off-shore Banking Unit maintain its accounting records in USD from which accounts are prepared according to the Bank Companies Act 1991, Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank.

1.2.2 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

1.2.3 Foreign currency transaction a) Foreign currencies transaction and translation to presentation currency

Foreign currency transactions are converted into equivalent USD using the ruling exchange rates on the dates of respective transactions as per

BAS-21" The Effects of Changes in Foreign Exchange Rates". Balances held in foreign currencies other than US Dollar are converted into

equivalent US Dollar at buying rates of New York closing of the previous day. Assets and liabilities & income and expenses have been converted

into Taka currency @ US$1 = Taka 78.4000 (closing weighted average rate as at 30 June 2016) which is the presentation currency for OBU.

(b) Commitments

Commitments for outstanding forward foreign exchange contracts disclosed in theses financial statements are translated at contracted rates. Contingent liabilities / commitments for letter of credit and letter of guarantee denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.

(c) Transaction gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the translation of net investment in foreign subsidiary.

1.2.4 Cash flow statement

Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 “Cash Flow Statement" under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

1.2.5 Reporting period These financial statements cover from 1 January to 30 June 2016.

1.3 Assets and basis of their valuation 1.3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit management for its short-term commitments.

Page | 128

1.3.2 Loans and advances / investments

(a) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis.

(b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts.

1.4 Basis for valuation of liabilities and provisions 1.4.1 Provision for liabilities

A provision is recognized in the balance sheet when the unit has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS-37 "Provisions, Contingent Liabilities and Contingent Assets".

1.4.2 Provision for loans and advances & tax

Provision for loans and advances & tax have been considered in the separate financial statements of the Bank which also includes OBU and have not been shown in the financial statements of OBU.

1.5 Revenue recognition 1.5.1 Interest income

In terms of the provisions of the BAS-18 "Revenue", the interest income is recognized on accrual basis. 1.5.2 Fees and commission income

Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.

1.5.3 Interest paid and other expenses

In terms of the provisions of the BAS - 1 "Presentation of Financial Statements" interest and other expenses are recognized on accrual basis.

2 General (a) These financial statements are presented in Taka, which is the Bank's functional currency. Figures appearing in these financial statements have

been rounded off to the nearest Taka.


USD Taka USD Taka

3 Loans and advances 3.1 Loans, cash credits, overdrafts etc

Term loan 8,371,019 656,287,919 9,469,692 743,373,693

8,371,019 656,287,919 9,469,692 743,373,693

3.2 Bills purchased and discounted 5

Inside Bangladesh 10,935,445 857,338,880 14,691,441 1,153,282,509

Outside Bangladesh - - - -

10,935,445 857,338,880 14,691,441 1,153,282,509

19,306,464 1,513,626,799 24,161,133 1,896,656,202

3.3 Geographical location-wise loans and advances Dhaka 19,306,464 1,513,626,799 24,161,133 1,896,656,202

Chittagong Division - - - -

Sylhet - - - -

Rajshahi Division - - - -

Khulna - - - -

Barisal - - - -

19,306,464 1,513,626,799 24,161,133 1,896,656,202

3.4 Classification of loans and advances

Unclassified : (i) Standard 19,306,464 1,513,626,799 24,161,133 1,896,656,202

(ii) Special mention account - - - -

Classified : (i) Substandard - - - -

(ii) Doubtful - - - -

(iii) Bad / Loss - - - -

19,306,464 1,513,626,799 24,161,133 1,896,656,202

Page | 129

4 Other assets

Interest receivable on Term loan 838,889 65,768,860 639,180 50,175,787

Interest receivable on Bills discount 73,946 5,797,360 1,217,263 95,555,475

912,834 71,566,220 1,856,442 145,731,263

5 Borrowing from other banks, financial Institutions and its agents

In Bangladesh: IFIC Bank Limited 20,139,752 1,578,956,587 25,386,327 1,992,834,279

Bangladesh Bank - - - -

20,139,752 1,578,956,587 25,386,327 1,992,834,279

Outside Bangladesh - - - -

20,139,752 1,578,956,587 25,386,327 1,992,834,279

6 Other liabilities Interest on bills discounted - - - -

Due to Head Office - - 524,561 41,178,214

- - 524,561 41,178,214

7 Surplus in profit and loss account Opening balance 106,687 8,374,971 240,653 18,758,773

Less: Adjustment/ payment for the year (106,687) (8,374,971) (240,653) (18,758,773)

Add: Addition during the year 79,546 6,236,432 106,687 8,374,971

79,546 6,236,432 106,687 8,374,971

Particulars Note 30 June 2016 30 June 2015

USD Taka USD Taka 8 Interest income Term Loan 230,872 18,100,368 214,545 16,691,658

LTR loan - - - -

Bills discount 357,832 28,054,050 408,942 31,815,757

Others - - - -

Interest on loans and advances 588,704 46,154,418 623,488 48,507,416

Interest on balance with other banks and financial - - - -

Interest received from foreign banks - - - -

- - - -

Total Interest income 588,704 46,154,418 623,488 48,507,416

9 Interest paid on deposits, borrowings etc. Interest paid on IFIC Bank Limited 512,568 40,185,330 567,890 44,181,875

Interest paid on Bangladesh Bank - - - -

512,568 40,185,330 567,890 44,181,875

Page | 130

Annexure – L

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF

IFIC SECURITIES LIMITED

We have audited the accompanying financial statements of IFIC Securities Limited which

comprise the statement of financial position as at 30 June 2016, and the statement of profit or loss

and other comprehensive income, statement of changes in equity and statement of cash flows for

the period, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994,

and other applicable laws and regulations and for such internal control as management determines

is necessary to enable the presentation of financial statements that are free from material

misstatements, whether due to fraud or error;

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those

standards require that we comply with relevant ethical requirements and plan and perform the

audit to obtain reasonable assurance whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessment, we consider internal control relevant to the

entity’s preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Page | 131

Opinion

In our Opinion, the financial statements present fairly, in all material respects, the financial position of IFIC Securities Ltd. as at 30 June 2016, and its profit or loss and other comprehensive income and its cash flows for the period in accordance with Bangladesh Financial reporting Standards (BFRSs).

We also report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the

company so far as it appeared from our examination of these books; (c) the company’s statement of financial position and statement of profit or loss and other

comprehensive income dealt with by the report are in agreement with the books of account; and

(d) the expenditure incurred was for the purpose of the company’s business.

Sd/-

Dated, Dhaka M. J. ABEDIN & CO 27 July 2016 Chartered Accountants

Page | 132

IFIC Securities Limited Statement of Financial Position

As at June 30, 2016

Amount in Taka

Notes 30-Jun-16 31-Dec-15 ASSETS:

Non Current Assets

Property, Plant and Equipments 4.00 5,172,856 5,665,189 Intangible Assets 5.00 345,045 405,935 Deferred Tax 6.00 83,084 83,084 Investments 7.00 89,003,312 89,321,750

94,604,297 95,475,958 Current Assets

Margin Loan to Clients 8.00 3,906,202,585 3,694,754,440 Accounts Receivable (DSE) 122,688 41,643,178 Dividend Receivable 47,190 163,725 Advance Deposits and Prepayments 9.00 147,532,879 136,891,896 Cash & Cash Equivalents 10.00 79,864,211 6,464,811 4,133,769,552 3,879,918,050

TOTAL 4,228,373,849 3,975,394,008

EQUITY AND LIABILITIES: Shareholders Equity

Share Capital 11.01 800,000,000 800,000,000 Retained Earnings 12.00 190,380,284 202,773,124

990,380,284 1,002,773,124 Current Liabilities

Provision for Income Tax 13.00 149,871,544 135,183,258 Clients Payable 14.00 58,947,228 34,940,489 DSE Payable 1,171,509 56,327 General Provision 15.00 137,926,155 95,630,969 Bank Loan 16.00 1,609,458,993 1,588,024,135 Other Liabilities 17.00 1,280,618,136 1,118,785,705

3,237,993,565 2,972,620,884 TOTAL 4,228,373,849 3,975,394,008

The annexed notes from an integral part of these financial statements.

Sd/- Sd/- Sd/-

Chief Executive Officer Director Director

(Current Charge)


Sd/- Dated : Dhaka M J Abedin & Co. 27 July 2016 Chartered Accountants

Page | 133

IFIC Securities Limited Statement of Profit or Loss and Other Comprehensive Income

For the period from January 01 to June 30, 2016

Amount in Taka

Notes

1st Jan to Jun 30, 1st Jan to Jun 30, 1st April to June 1st April to June 2016 2015 30, 2016 30, 2015

Income: Operating Income 18.00 144,932,999 126,278,310 81,692,838 63,783,078

Non-Operating Income 19.00 7,343,256 138,912 7,304,775 72,206

152,276,255 126,417,221 88,997,613 63,855,284

Expenses:

Operating Expenses 20.00 2,850,901 3,310,992 969,169 2,268,246

Office & Administrative Expenses 21.00 13,469,658 13,956,606 6,956,308 7,173,678

Financial Expenses 22.00 91,365,064 95,915,018 35,528,634 49,428,407

107,685,623 113,182,616 43,454,111 58,870,331

Profit/(Loss) before Provisions and Tax 44,590,632 13,234,605 45,543,502 4,984,953

Less: Provision 23.00 42,295,186 19,761,182 42,103,229 (10,634,839)

Profit After Provision 2,295,447 (6,526,577) 3,440,273 15,619,792

Less: Income Tax 13.00 14,688,286 4,673,513 11,904,114 1,846,157

14,688,286 4,673,513 11,904,114 1,846,157

Net Profit/(Loss) After Tax (12,392,840) (11,200,090) (8,463,840) 13,773,635


Sd/- Sd/- Sd/-


(Current Charge)


Sd/- Dated : Dhaka M J Abedin & Co.

27 July 2016 Chartered Accountants

Page | 134

IFIC Securities Limited Statement of Changes in Equity

For the period from January 01 to June 30, 2016 Amount in Taka

Particulars Share Capital

Retained Total

Earnings

Opening Balance as on 01.01.2016 800,000,000 202,773,124 1,002,773,124

Profit/(Loss) during the period - (12,392,840) (12,392,840)

Balance as on June 30, 2016 800,000,000 190,380,284 990,380,284

Statement of Changes in Equity

For the Year Ended December 31, 2015

Particulars Share Capital Retained

Total Earnings

Opening Balance as on 01.01.2015 800,000,000 192,731,674 992,731,674

Profit/(Loss) during the period 10,041,450 10,041,450

Balance as on December 31, 2015 800,000,000 202,773,124 1,002,773,124


Sd/- Sd/- Sd/-



Sd/-

Dated : Dhaka M J Abedin & Co.


Page | 135

IFIC Securities Limited Statement of Cash Flows

For the period from January 01 to June 30, 2016

Amount in Taka

Notes 30-Jun-16 31-Dec-15

A. Cash flows from Operating Activities:

Net profit before tax 44,590,632 46,003,617

Add: Non Cash Transaction

Sundry Payable 58,664 (21,335)

Liabilities for Expenses 1,419,803 1,051,682

Unrealized Interest Income 17.03 160,353,964 301,732,246

Amortization of Intangible Assets Annx- A.2 60,890 173,972

Depreciation Annex- A.1 502,934 1,285,745

162,396,255 304,222,309

Increase/(Decrease) in Clients Payable 24,006,739 (174,469,911)

Increase/(Decrease) in Payable to IPO App - (90,000)

Increase/(Decrease) in Dividend Receivable 116,533 207,925

Increase/(Decrease) in DSE Payable 1,115,182 9,340

(Increase)/Decrease in Accounts Receivable (DSE) 41,520,490 18,366,281

(Increase)/Decrease Advance Deposit and Prepayments (10,640,983) (6,942,872)

Net cash flows from operating activities 263,104,848 187,306,689

B. Cash flows from Investing Activities:

Investments in Securities 318,438 2,988

Purchase of Property, Plant and Equipments Annex- A.1 (10,600) (419,690)

Loan to Clients (211,448,145) (357,757,798)

Net Cash flows from Investing Activities (211,140,307) (358,174,502)

C. Cash flows from Financing Activities:

Loan from Dhaka Bank Limited 42,078,047 (39,888,340)

Loan from IFIC Bank Limited (31,617,121) 95,634,893

Loan from Prime bank Limited 10,973,932 29,383,160

Net cash flows from Financing Activities 21,434,858 85,129,713

D. Net increase in Cash and Cash Equivalents (A+B+C) 73,399,400 (85,738,100)

E. Opening Cash and Cash Equivalents 6,464,811 92,202,910

F. Closing Cash and Cash Equivalents (D+E) 10.00 79,864,211 6,464,811


Sd/- Sd/- Sd/-


(Current Charge)


SD/-

Dated : Dhaka M J Abedin & Co.


Page | 136

IFIC Securities Limited Notes to the Financial Statements For the period from January 01 to June 30, 2016

SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATERIAL INFORMATION:

1.0 Status of the reporting entity 1.1 Corporate history:

IFIC Securities Limited was incorporated in Bangladesh and registered with Joint Stock

Companies and Firms vide its registration number C-87904/10 on November 02, 2010 as a public

limited company with an Authorized Capital of BDT 3,000,000,000 divided into 300,000,000

ordinary shares of BDT10 each. The registered office of the company is located at BDBL Bhaban

(10th Floor) 8 Rajuk Avenue, Dhaka-1000. 1.2 Nature of business:

The principal objectives of the company for which it was established are to carry on the business of stock brokers, dealers in relation to shares and securities dealing and other services as mentioned in the Memorandum and Articles of Association of the Company.

2.0 Basis of preparation:

2.1 Statement of compliance:

The financial statements of IFIC Securities Limited have been prepared in accordance with the Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs), Companies Act 1994 and other applicable laws in Bangladesh.

2.2 Measurement bases used in preparing the financial statements:

The elements of financial statements have been measured on "Historical Cost" basis, which is one of the most commonly adopted base provided in "the framework for the preparation and presentation of financial statements" issued by the International Accounting Standard Committee (IASC).

2.3 Use of estimates and judgments:

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Page | 137

IFIC Securities Limited Notes to the Financial Statements For the period from January 01 to June 30, 2016 2.4 Accounting convention and basis:

These Financial Statements have been prepared under the Historical Cost Convention and Going Concern basis in accordance with applicable International Accounting Standards in Bangladesh which does not vary from the requirements of the Companies Act 1994, and other laws and rules applicable in Bangladesh.

2.5 Functional and presentational currency and level of precision:

The financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company’s functional currency. All financial information presented has been rounded off to the nearest Taka except where indicated otherwise.

2.6 Reporting period:

The financial period of the company covers six months from 1 January 2016 to 30 June 2016. 2.7 Components of the financial statements:

According to the International Accounting Standard (IAS) 1 as adopted by ICAB as BAS-1 "Presentation of Financial Statements" the complete set of financial statements includes the following components:

i) Statement of Financial Position ii) Statement of Profit or Loss and Other Comprehensive Income iii) Statement of Changes in Equity iv) Statement of Cash Flows v) Notes to the Financial Statements

3.0 Principal accounting policies:

The accounting policies set out below have been applied in preparations of these financial statements

3.1 Property, plant and equipment 3.1.1 Recognition and measurement:

Items of Property, Plant and Equipment (PPE) are initially measured at cost. After initial recognition, an item of PPE is carried at cost less accumulated depreciation and impairment losses in compliance with the requirements of BAS-16: Property, Plant and Equipment.

3.1.2 Disposal of fixed assets:

On disposal of fixed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reflected in the Comprehensive Income, which is determined with reference to the net book value of the assets and net sales proceeds.

Page | 138

IFIC Securities Limited Notes to the Financial Statements For the period from January 01 to June 30, 2016 3.1.3 Depreciation on fixed assets:

Depreciation is recognized in the Comprehensive Income on a written down value basis over the estimated useful life of each property, plant and equipment in accordance with the provisions of BAS 16: Property, Plant and Equipment.

Rate of depreciation on Property, Plant and Equipment considering the useful life of assets are as follows:

Sl no Particulars of assets Rate

1 Furniture & Fixture 10.00%

2 Electric Goods 20.00%

3 Computer & Equipments 30.00%

4 Office Renovation 20.00%

5 Other Assets 40.00%

3.2 Accounts receivables

Accounts Receivables are consider good and realizable. No provision or allowance to be made during the year.

3.3 Advance, deposits and prepayments

Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc. Deposits are measured at payment value. Prepayments are initially measured at cost. After initial recognition prepayments are carried at cost less charges to profit and loss account.

3.4 Cash and cash equivalents:

Cash and Cash equivalents include cash in hand and with banks on current and deposit accounts which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.

3.5 Other current assets:

Other current assets have a value on realization in the ordinary course of the company's business which is at least equal to the amount at which they are stated in the balance sheet.

3.6 Other corporate debt, accounts payable, trade and other liabilities:

Liabilities are carried at the anticipated settlement amount in respect of goods and services received, whether or not billed by the supplier.

Page | 139

IFIC Securities Limited Notes to the Financial Statements For the period from January 01 to June 30, 2016 3.7 Income Tax & Deferred Tax :

The company has to pay income tax on its total turnover as tax deducted at source and provision has been made accordingly as per Income Tax Ordinance 1984 under section 53BBB.

As per provision of BAS # 12 : Income tax and Deferred Tax liabilities shall be measured and shall be reflected the tax consequence of the entity at the balance sheet date.

The entity did not recognize and deferred tax during the period as there would have arisen Deferred tax income it deferred tax was recognized due to deductible temporary difference at the period end date.

3.8 Provisions:

Provision is recognized on the balance sheet date if, as a result of past events, the company has a presents legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.

3.9 Revenue recognition:

Commissions are realized income whenever the commission amount transferred from clients account to Company’s account and satisfying all the conditions for revenue recognition as provided in BAS-18 “Revenue”.

3.10 Cash flow statement:

Statement of Cash Flows is prepared in accordance with BAS-7 “Cash Flow Statement”. The cash flow from the operating activities has been presented under indirect Method and considering the provisions of Paragraph 19(2) of BAS-7 which provides that “Enterprises are encouraged to report Cash Flow from Operating Activities using the Direct Method”.

3.11 Responsibility for preparation and presentation of financial statements:

The Management is responsible for the preparation and presentation of Financial Statements under section 183 of the Companies Act, 1994 and as per the Provision of “The Framework for the preparation and presentation of Financial Statements” issued by the International Accounting Standard Board (IASB) as adopted by the Institute of The Chartered Accountants of Bangladesh (ICAB).

3.12 Risk and uncertainties for the use of estimates in preparing financial statements:

Preparation of Financial Statements in conformity with the Bangladesh Accounting Standards

requires management to make estimates and assumption that effect the reported amounts of

assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial

statement and revenues and expenses during the period reported. Actual result could differ from

those estimates. Estimates are used for accounting of certain items such as depreciation and

amortization, taxes, reserves and contingencies. 3.13 Comparative amounts:

Certain comparative amounts have been re-classified & rearranged to confirm with the current year's presentation.

Page | 140


Amount in Taka

30-Jun-16 31-Dec-15

4.00 Property, Plant & Equipment

Furniture and Fixture 2,386,195 2,511,784

Electric Goods 903,803 1,004,226

Computer and Equipments 963,497 1,122,925

Office Renovation 885,212 983,569

Other Assets 34,149 42,686

5,172,856 5,665,189

Details please refer to Annexure -A-1

5.00 Intangible Asset 345,045 405,935

Details please refer to Annexure -A-2

6.00 Deferred Tax Assets Carrying amount of fixed assets - 6,071,123 Tax base value - 6,308,505 Taxable temporary difference - 237,382 Tax rate - 35% Closing deferred tax assets/(liabilities) - 83,084

Opening deferred tax assets/(liabilities) 83,084 (49,961) Deferred tax income/(expense) 133,045

7.00 Investments

Membership with DSE * 74,989,000 74,989,000

Investment in Shares 14,014,312 14,332,750

89,003,312 89,321,750

Investment in Shares are detail in Annexure - B

* This represents our original Investment cost for DSE membership in exchange of which

shares at a face value of BDT 10 each have been allotted in favour of the Company in October

2013 for DSE. As per the provision of the Exchange Demutualization Act-2013 and in

accordance with the Bangladesh Securities and Exchange Commission (BSEC) approved

Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE) allotted total 72,15,106 ordinary

Shares at face value of BDT 10 each against the membership of DSE. Out of the above DSE

transferred 2,886,042 shares directly to the credit of the Beneficiary Owner's account of the

Company. The rest shares were credited to blocked accounts as per provisions of the

Exchange Demutualization Act. 2013. As there is no active market for shares DSE, we have

shown the value at original cost of our Investment.

8.00 Margin Loan to Clients 3,906,202,585 3,694,754,440

Page | 141


Amount in Taka

30-Jun-16 31-Dec-15

9.00 Advance Deposit and Prepayments

Advance Income Tax 144,457,096 133,978,956

Advance For Nikunjo 850,000 850,000

Pre-Paid LFA 124,900 -

Advance Bank Guarantee Commission 2,100,883 1,995,083

Pre-Paid Rent - 67,857 147,532,879 136,891,896

10.00 Cash and Cash Equivalents

Cash in Hand 44,441 30,095

Cash at Bank

IFIC Bank Ltd. Motijheel Br. A/C-365185-001 79,770,152 5,757,653

IFIC Bank Ltd. Motijheel Br. A/C-354511-001 - 642,063

IFIC Bank Ltd. Motijheel Br. SND 49,617 34,999

Dhaka Bank Ltd. Foreign Ex. Br. A/C-2031.10.11050 1 1

Sub-Total 79,819,770 6,434,716

Total 79,864,211 6,464,811

11.00 Share Capital

Authorized Capital

30,00,00,000 Ordinary Shares of Tk 10/- each 3,000,000,000 3,000,000,000

11.01 Issued, Subscribed & Paid-up Capital

80,000,000 Ordinary Share of Tk 10/- each 800,000,000 800,000,000

11.02 Shareholding Position

Shareholder

No. of Shares Face Amount in Taka

Y2016

Y2015

value Y2015 Y2016

IFIC Bank Limited 79,999,400 79,999,400 10 799,994,000 799,994,000

Mr. M. Shah Alam Sarwa 100 100 10 1,000 1,000

Mr. S.M. Abdul Hamid 100 100 10 1,000 1,000

Mr. M.M Haikal Hashmi 100 100 10 1,000 1,000

Mr. Shah Md. Moinuddin 100 100 10 1,000 1,000

Mr. Fariduddin Al Mahm 100 100 10 1,000 1,000

Mr. Ashim Chowdhury 100 100 10 1,000 1,000 80,000,000 80,000,000 800,000,000 800,000,000

12.00 Retained Earnings Opening balance 202,773,124 192,731,674 Add: Profit during the year (12,392,840) 10,041,450 190,380,284 202,773,124

Page | 142


Amount in Taka

30-Jun-16 31-Dec-15

13.00 Provision for Income Tax

Opening Balance 135,183,258 118,927,354 Add: Provision for the year 14,688,286 16,255,904

149,871,544 135,183,258

14.00 Clients Payable

Payable to IFIC Bank Ltd 9,461,293 1,438,193

Others Client Payble 49,485,935 33,502,296 58,947,228 34,940,489

15.00 General Provision

Provision For Investment 6,884,350 6,884,350

Provision For Margin (Note-15.01) 131,041,805 88,746,619

137,926,155 95,630,969

15.01 Provision For Margin Loan

Opening balance 88,746,619 73,071,661

Add: Provision for the Period 42,295,186 15,674,958

131,041,805 88,746,619

16.00 Bank Loan

Loan from IFIC Bank Ltd, Motijheel Branch 1,263,766,052 1,295,383,173

Loan from Dhaka Bank Ltd, Foreign Ex. Branch 148,960,892 106,882,845

Loan from Prime Bank Ltd, SBC Tower Branch 196,732,049 185,758,117

1,609,458,993 1,588,024,135

17.00 Other Liabilities

Sundry Payable Note-17.01 198,165 139,501

Liabilities for Expenses Note-17.02 5,078,965 3,659,162

Unrealized Interest Incom Note-17.03 1,275,341,006 1,114,987,042

1,280,618,136 1,118,785,705

17.01 Sundry Payable

VAT Payables 69,903 78,768

Tax Payable 128,262 60,733

198,165 139,501

Page | 143


Amount in Taka

30-Jun-16 31-Dec-15

17.02 Liabilities for Expenses

Mobile/ Telephone Allowance 2,875 2,875

Office Rent 3,550,685 1,768,651

Electricity 15,850 15,850 CDBL 660,893 491,570 Audit & Professional Fees 160,000 200,000

Printing & Stationery 19,500 19,500

Insurance 8,846 8,846

Incentive Bonus 660,316 1,151,870

5,078,965 3,659,162

17.03 Unrealized Interest Income

Opening balance 1,114,987,042 813,254,797

Add: During the year 160,353,964 366,722,787

Less :Dividend Income - (8,600,614)

Less :Interest Realized - (56,389,927)

1,275,341,006 1,114,987,042

Page | 144




30-Jun-16 31-Dec-15

18.00 Operating Income

Brokerage Commission 22,981,490 53,819,485

Interest on Margin Loan 121,951,509 221,311,218

144,932,999 275,130,703

19.00 Non-Operating Income:

Documentations Charge 4,500 25,500

Account Opening Fee 12,500 129,400

Interest on SND 16,242 35,727

Miscellaneous Note-19.01 22,331 2,215,805

IPO Income 9,025 14,804

Dividend Income 7,262,296 206,625

Capital Gain (Realized) 16,362 (1,048)

7,343,256 2,626,813

20.00 Operating Expenses

Laga 1,500,901 3,471,846

CDBL 1,350,000 3,990,000

2,850,901 7,461,846

21.00 Office & Administrative Expenses

Salary and Allowances Note-21.01 7,426,514 16,330,982

Director's Remuneration 109,250 86,250

Entertainment 150,360 256,777

Conveyance 23,180 44,185

Printing Stationery 73,105 156,587

DSE 36,131 60,905

Office Rent 4,258,354 8,127,429

Electricity 39,634 78,948

Regulatory 78,680 132,153

Repair and Maintenance 45,610 119,820

Audit Fee 60,000 262,500

Legal and Professional Fee 45,250 237,188

WASA 18,000 36,000

Newspaper 7,476 15,508

Cleaner's 15,800 24,610

Water 26,390 47,915

Software Maintenance 109,725 219,450

Connectivity 264,100 576,800

Depreciation 502,934 1,285,746

Amortization 60,890 173,972

Cookeries 2,400 3,510

Security Guard 101,430 202,860

Gas & Fuel 500 4,975

Postage & Courier 1,876 1,141

Beautification Exp. 7,500 18,000

Washing Expenses 4,570 9,040

13,469,658 28,513,251

Page | 145




30-Jun-16 31-Dec-15

21.01 Salary and Allowances Salary & Benefit 5,771,022 12,517,058

Car Maintenance 169,448 383,340

Fuel Allowance 218,120 451,440

Utility 147,000 319,000

Office Attendant Allow 9,670 9,630

Insurance Vehicle 12,945 36,824

Bonus 586,009 1,239,390

Leave Fare Assistance 369,500 1,030,800

Casual Worker Wages 54,600 123,000

Diploma Honarium - 30,000

Telephone and Mobile Bill 88,200 190,500

7,426,514 16,330,982

22.00 Financial Expenses

Bank Charges 65,074 177,260

Bank Guarantee Charge 1,294,200 2,588,400

Interest on Bank Loan 90,005,790 193,013,142

91,365,064 195,778,802

23.00 Provisions

Provision for Investment - 4,164,349

Provision for Margin Loan to Clients 42,295,186 15,674,958

42,295,186 19,839,307

24.00 Contingent Liabilities

Bank Guarantee for DSE Member Margin 100,000,000 100,000,000

Total 100,000,000 100,000,000

Page | 146


Schedule of Fixed Assets

Annexure-A -1

Amount in Taka

Cost Depreciation Written

Particulars

Rates

Opening Addition Disposal Closing Opening

For the Year Closing Down Value

Balances Balances Balances

Furniture and Fixture 4,245,462 - - 4,245,462 10% 1,733,678 125,589 1,859,267 2,386,195

Electric Goods 3,037,561 - - 3,037,561 20% 2,033,336 100,423 2,133,758 903,803

Computer and Equipments 4,191,786 10,600 - 4,202,386 30% 3,068,861 170,029 3,238,890 963,497

Office Renovation 2,108,129 - - 2,108,129 20% 1,124,560 98,357 1,222,917 885,212

Other Assets 336,183 - - 336,183 40% 293,498 8,537 302,035 34,149

Total 13,919,122 10,600 - 13,929,722 8,253,933 502,934 8,756,868 5,172,856

Schedule of Intangible Assets

Annexure-A -2

Amount in Taka

Cost Depreciation Written

Particulars

Closing Rates Opening

Closing

Opening Addition Disposal For the Year

Down Value Balances Balances Balances

Windows License 108,090 - - 108,090 30% 69,345 5,812 75,156 32,934 Sign up DSE 87,000 - - 87,000 30% 65,173 3,274 68,447 18,553 Software Development 698,600 - - 698,600 30% 364,526 50,111 414,637 283,963 Scan Entry Virus 45,000 - - 45,000 30% 33,710 1,693 35,404 9,596

Total 938,690 - - 938,690 532,755 60,890 593,645 345,045

Page | 147

IFIC Securities Limited Statement of Investment in Shares

Annexure-B

Amount in Taka Closing

Opening Balances Buy during the Year Sale during The Year Balance

Market

SL. Name of the Units Cost Market

No. of Unit Bonus No. of Unit Total No. of Unit No. of Unit Provision

No. company Total Cost Total Cost Total Cost on Value

Shares Cost Shares Cost Cost Shares Cost Shares Cost 31.03.2016

1 Titas Gas 93,750 79.05 7,410,660 - - - - - - - 93,750 79.05 7,410,660 43.80 4,106,250 3,304,410

2 Power grid 15,400 58.97 908,140 - - - - 5,400 58.97 318,438 10,000 58.97 589,702 55.20 552,000 37,702

3 Northern Ins 81,312 45.59 3,706,950 9,757 - - - - - - 91,069 40.70 3,706,950 16.10 1,466,211 2,240,739

4 Eastland Ins 47,190 48.89 2,307,000 4,719 - - - - - - 51,909 44.44 2,307,000 21.00 1,090,089 1,216,911

Total 14,332,750 14,014,312 7,214,550 6,799,762

IFIC securities Ltd Required provision for negative equity

Base for provision Required Asset Value Margin Loan Negative Equity Suspense amount Held By Bank Shortfall

provision Rate provision

1,715,980,522 3,646,530,552 1,930,550,030 1,275,341,006.16 655,209,024 20% 131,041,805 88,746,619 42,295,186

Page | 148


Related Party Disclosures

For the period from January 01 to June 30 2016

Co

mp

an

y

Na

me

of

the

Lim

ited

IFIC

Ba

nk

Total Transactions during the year (TK)

Debit Credit

45,200,000 45,478,782

- 346,800

1,401,641,898 106,258,725

828,109,230 754,096,730

48,450,365 1,312,858,480

- -

Rel

ati

on

ship

wit

h t

he

Co

mp

an

y

Ho

ldin

g C

om

pa

ny

Nature of Balance as on Balance as on

Transaction 30.06.2016 31.12.2015

Trading

Acount,

Code#1111 669,680.19 390,898.17

Provident

Fund - -

Loan from

Motijheel

Branch - 1,295,383,172

Current

Account

Motijheel

Branch 365185 79,770,153 5,757,653

Current

Account

Motijheel

Branch 354511 (1,263,766,052) 642,062.91

Rent Paid - -

Page | 149

Annexure – M

Report of the Independent Auditors to the Members of IFIC MONEY TRANSFER (UK) LIMITED

We have audited the financial statements of IFIC MONEY TRANSFER (UK) LIMITED for the period ended

30 June 2016 on pages four to eight. The financial reporting framework that has been applied in their

preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April

2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors As explained more fully in the Statement of Directors' Responsibilities set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors, including "APB Ethical Standard - Provisions Available for Small Entities (Revised)", in the circumstances set out in note nine to the financial statements.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 30 June 2016 and of its loss for

the period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice applicable to Smaller Entities; and - have been prepared in accordance with the requirements of the Companies Act 2006.

Page | 150

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been

received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit; or - the directors were not entitled to prepare the financial statements in accordance with the small

companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Sd/- Tofail Ahmed (Senior Statutory Auditor) for and on behalf of Ahmed & Co Ferrari House ( 2nd Floor ) 102 College Road Harrow Middlesex HA1 1ES

Date: 22 July 2016

Page | 151

IFIC Money Transfer (UK) Limited

Profit & Loss Account For the half year ended 30 June 2015

Figs in UK Pound Sterling

Note H1 Y2016 H1 Y2015 Q2 Y2016 Q2 Y2015

Turnover 11 143,970 196,396 88,440 93,919

Administrative expenses 12 96,122 96,557 54,168 50,383 Operating profit 47,848 99,839 34,272 43,536

Interest payable and similar charges 13 51,261 61,750 22,215 32,315 Profit before taxation (3,413) 38,089 12,057 11,221

Tax on loss on ordinary activities 3 - - - -

Profit/(loss) after taxation (3,413) 38,089 12,057 11,221

The notes form part of these financial statements

Page | 152

IFIC Money Transfer (UK) Limited

Balance Sheet as at 30 June 2016


Note 30-Jun-16 31-De c-15

Tangible fixed assets 4 64,103 72,605

Debtors 5 5,750 5,750

Cash at Bank and in hand

323,576

249,885

Current Assets 329,326 255,635

Creditors 6 210,242 141,640

Net Current Assets 119,084 113,995

Total Assets less current liabilities 183,187 186,600

Capital and Reserves

Called up share capital 7 300,000 300,000

Profit and loss account 8 (116,813) (113,400)

Shareholders' Funds 183,187 186,600

- -

The financial statements have been prepared in accordance with the special

provisions of Part 15 of the Companies Act 2006 relating to small companies and

with the Financial Reporting Standard for Smaller Entities (effective April 2008).

The financial statements were approved by the Board of Directors on 22 July 2016

and were signed on its behalf by:

Sd/- ……………………… Jalal Ahmed - Chairman

The notes form part of these financial statements

Page | 153

IFIC MONEEY TRANSFER (UK) LIMITED Notes to the Financial Statements As at and for the period ended 30 June 2016

1. Accounting policy

Accounting convention The financial statements have been prepared under the historical cost convention and in accordance

with the Financial Reporting Standard for Smaller Entities (effective April 2008)

Turnover Turnover represents net invoiced sales of services, excluding value added tax.

Tangible fixed assets Depreciation is provided at the following annual rates in order to write off each asset over its

estimated useful life.

Category Rate Base

Short leasehold 10% on cost

Plant and machinery 15% on cost

Computer equipment 33% on cost

2. Operating (loss)/profit

The operating loss (2015 - operating profit) is stated after charging:

30-Jun-16 31-Dec-15

Depreciation - owned assets 8,502 16,939

Auditors' remuneration 1,200 3,600

Directors' remuneration and other benefits etc - -

3. Taxation

No liability to UK Corporation Tax arose on ordinary activities for the year period ended 30 June

2016 or for the corresponding period of year ended 31 December 2015

4. Tangible Fixed Assets Figs in UK Pound Sterling

Short Plant and Computer Totals

leasehold machinery equipment

Cost

At 1 January 2016

and 30 June 2016 75,006 59,518 4,051 138,575

Depreciation

At 1 January 2016 28,750 33,711 3,509 65,970

Charge for period 3,750 4,480 272 8,502

At 30 June 2016 32,500 38,191 3,781 74,472

Net book value

At 30 June 2016 42,506 21,327 270 64,103

At 31 December 2015 46,256 25,807 542 72,605

Page | 154


30-Jun-16 31-De c-15

5. Debtors

Other debtors 5,750 5,750

6. Creditors

Trade creditors 202,932 133,428

Taxation and social security 3,110 2,812

Other creditors 4,200 5,400

210,242 141,640

7. Called up Share Capital Allotted, issued and fully paid:

Number Class Face Value

300,000 Ordinary £1 300,000 300,000

8. Reserves

Balance as at 1 January (113,400) (163,569)

Profit during the period/year (3,413) 50,169

(116,813) (113,400)

9. APB Ethical Standard - Provisions available for Small Entities

In common with many other businesses of our size and nature we use our auditors to prepare and

submit returns to the tax authorities and assist with the preparation of the financial statements

10. Ultimate Controlling Party The company is fully owned and controlled by IFIC Bank Limited, a company incorporated in

Bangladesh.

H1 Y2016 H1 Y2015

11. Turnover

Commission 143,970 196,396

Page | 155

12. Administrative expenses

Establishment costs H1 Y20 H1 Y201616

H1 Y2

H1_Y2015

Rent 20,500 17,900

Rates and water 7,993 7,294

Insurance 102 -

Light and heat 876 880

29,471 26,074

Overhead costs

Wages 40,067 36,786

Social security 2,180 2,218

Telephone 743 568

Printing, postage & stationery 430 4,240

Travelling 12 755

Subscription - 194

IT costs 2,569 2,700

Repair and renewals 1,184 2,106

Cleaning 210 286

Sundry expenses 325 1,279

Accountancy 2,400 2,400

Legal fees - -

Compliance costs 600 2,280

Other professional fees 1,320 500

Auditors' remuneration 1,200 1,200

53,240 57,512

Selling and marketing costs

Advertising 2,298 4,580

Promotion andd exhibitions 2,611 -

4,909 4,580

Depreciation

Short leasehold 3,750 3,750

Plant and machinery 4,480 4,464

Computer equipment 272 177

8,502 8,391

96,122 96,557

13. Interest payable and similar charges

Bank charges 50,736 61,750

Credit card 525 -

51,261 61,750

Page | 156

Credit Rating Report (Surveillance)

International Finance Investment & Commerce Bank Limited

Ratings Long Term : AA2

Short Term : ST-2

Outlook : Stable

Date of Rating: 23 June 2016 Validity : 30 June 2017

Last Ratings

Date of Ratings Long Term Short Term Outlook

09 July 2015 AA2 ST-2 Positive

Rating Based on: Audited financial statements up to 31 December 2015, and other relevant quantitative as well as

qualitative information up to the date of rating declaration.

Methodology: CRAB’s Bank Rating Methodology (www.crab.com.bd) Analysts: Mohammed Nazrul Islam Bhuiyan

[email protected]

Shahtaj Noor

[email protected]

named IFIC Securities Limited and IFIC Money Transfer Key Performance Indicator of the Bank

(UK) Limited.

Year Ended December 31

Mil. BDT 2015 2014 RATIONALE

Loans 123,268.7 102,282.1

Credit Rating Agency of Bangladesh Limited (CRAB) has Deposit 146,819.7 129,745.8

affirmed AA2 (Pronounced Double A two) rating in the Gross NPL 7,962.1 5,061.1

long term and ST-2 rating in the short term to the IFIC

Figures in % Bank Limited based on audited financials up to 31st

NIM 3.1 3.2 December 2015 and other relevant information.

ROAA (after tax) 0.5 1.1 The rating reflects the Bank’s strength in earning RWCAR 10.07 10.14

generation, large branch network, and substantial Gross NPL Ratio 6.5 4.9

shareholding of the government (32.75%) shares as well Cost to Income Ratio 54.6 58.2

as large asset portfolio. On the other hand, principal

PROFILE

concerns of the Bank are increased high fresh NPL and

marginal risk weighted capital adequacy.

International Finance Investment & Commerce Bank

Limited (hereinafter referred to as ‘IFIC’ or ‘the Bank’) Net interest income remained the dominating revenue

was established in 1976 at the instance of the govt. as a sources having 46.6% of total operating income in 2015

joint venture finance company named “International followed by investment income (29.6% of total);

Finance and Investment Company Limited”. In 1983 this commission/fees Income (17.6% of total) and other

finance company was converted into a commercial bank operating income (6.2% of total). Net interest income of

under the name “International Finance Investment and the Bank increased by 10.5% and stood at BDT 3,746.2

Commerce Bank Limited”. million in 2015. On the other hand, investment income

slightly reduced (by 0.1%) in 2015 and reached BDT

The Bank went into IPO in 1986. The paid up capital of 2,375.2 million. Commission, exchange & brokerage

the Bank reached BDT 5,034.1 million against authorized income of the Bank grew by 6.5% in 2015 and reached

capital of BDT 20,000.0 million at the end of December BDT 1,414.2 million. As an overall effect, total operating

2015. Bangladesh Government holds 32.75% of the Bank. income increased by 5.8% in 2015 and reached BDT

The Bank offers all kinds of banking and investment 8,037.0 million. services for retail and corporate customers through its

network of 129 branches. The Bank has two subsidiaries

2016

Bank

IFIC

Ba

nk L

imite

d

C

RA

B R

ati

ng R

eport

Page | 157

Net interest margin of the Bank remained stable in 2015. Both ROAA and ROAE decreased to 0.5% and 7.7%

respectively in 2015. Net profit margin also decreased by 9.3 percent points in 2015 due to substantial increase of

provision expense. Return on average risk weighted assets was 0.8% in 2015. Cost to income ratio of the Bank

decreased by 3.6% but still higher than the PCB industry average.

The Bank’s asset quality deteriorated during the last couple of years. Gross NPL (in absolute amount) increased by

57.3% in 2015 and reached BDT 7,962.1million resulted from increased fresh NPL. The impact of high growth in fresh

NPL (7.3% of total loans) was partly offset by rescheduling of loans as well as from substantial growth of loans &

advances. The Bank had written off loan amounting BDT 1,224.0 million in 2015. As an overall effect, gross NPL ratio

of the Bank was 6.5% at the end of 2015. In 2015, net NPL of the Bank was 19.5% of Tier I capital (2014: 4.3%).

The Bank was marginally capitalized in respect of risk weighted capital adequacy ratio with 10.07% (tier I ratio of

8.96%). Core capital to total exposure (on and off balance sheet) of the Bank was 4.65% at the end of 2015 (2014:

4.75%). Risk weighted asset of the Bank grew by 5.1% in 2015 and reached BDT 117,314.4 million mainly resulted

from growth of credit risk due to the 20.5% growth of loans & advances. At the end of Mar’16, RWCAR stood at 10.02%

which may increase further as the Bank has issued tier-II bond amounting BDT 3,500.0 million. Moreover, the Bank

is going to raise paid up capital through issuance of Rights Share subject to approval of Regulatory Authorities which

will increase the capital as well as RWCAR in near future.

The asset liability maturity of the Bank shows that the Bank possessed positive net liquidity gap for all maturity

buckets except 1-5 years bucket. The Bank’s liquid asset to deposit & borrowings was 26.7% in 2015 (2014: 30.4%).

Total off balance sheet portfolio was 26.8% of total asset of the Bank in 2015. In 2015, off balance sheet portfolio

was dominated by letter of credit (8.3% of total) followed by acceptances and endorsements (8.0% of total), letter of

guarantee (5.4% of total) and bills for collection (5.1% of total). Total off balance sheet exposures of the Bank was 4.0

times of its total capital by the end of December 2015 (2014: 4.2 times).

MACROECONOMIC SCENARIO1

Bangladesh economy experienced severe disruption in production, transport and service delivery during the third

quarter of FY15 due to prolonged political turmoil. However, the fourth quarter was remarkably stable as were the

first two. GDP growth of Bangladesh increased to 6.5 percent in FY15, from 6.1 percent in FY14. GDP growth in last

six years was on average 6.2 percent. This was better than average growth in Pakistan (3.9), Indonesia (5.6) and

Vietnam (5.9) but well behind average growth in India (7.3) and Sri Lanka (7.1).

GDP growth was driven by rise in industrial growth from 8.2 percent in FY14 to 9.6 percent in FY15. Although export

growth (in US$) declined to 3.4 percent, remittance growth recovered to 7.7 percent. Industrial growth was mainly

driven by manufacturing which achieved a significantly higher growth of 10.3 percent in FY15 despite the severe

disruption of the supply chain during the political turmoil. On the expenditure side, the private investment rate (as

percent of GDP) has stagnated since FY12.

Overall consumer inflation decreased to 6.4 percent in FY15 from 7.3 percent the previous year, driven by decrease

in food inflation. Non-food inflation increased due to supply disruptions caused by the political unrest in the first

quarter of 2015. The gap between rural and urban food inflation narrowed. Prudent aggregate demand management

helped limit inflation volatility while declining international commodity prices contributed to reducing inflation.

According to the Export Promotion Bureau (EPB), export earnings (f.o.b.) increased by 3.3 percent to USD 30.77 billion

in FY15 compared to USD 29.77 billion in FY14. Apparels (woven garments and knitwear products) continued to

occupy an overwhelming share of the export basket in FY15 followed by jute goods and frozen fish. Overall export

of woven garments (5.0 percent), knitwear products (3.1 percent), jute goods (8.4 percent) increased in FY15

compared to FY14; while export of raw jute (-11.7 percent), leather (-21.4 percent), and frozen shrimp and fish (-

7.7 percent) decreased. Import payments (according to customs data) increased by 11.3 percent to USD 45.19 billion

in FY15 from USD 40.62 billion in FY14.

1 Source: Bangladesh Bank Publications, Quarterly Economic Update by ADB, Bangladesh Economic Update by World Bank- Oct’15

Page | 158

Disbursement of industrial term loans during FY15 increased by 29.23 percent to BDT 597.84 billion (FY14: BDT

423.11 billion). Large scale industries received major portion of disbursement (76.65% of Total). However

disbursement of small scale and cottage industries experienced 20.46 percent growth and reached BDT 46.25 billion.

On the Other hand, recovery of industrial term loans recorded 12.06 percent growth.

MONETARY & FINANCIAL DEVELOPMENT1 Bangladesh Bank succeeded in keeping the FY15 broad money (M2) and reserve money growth in line with the target

rates. Broad money growth slowed to 12.4while reserve money growth slowed to 14.3 percent over its stock at end-

June 2014. Policy rates were not changed during 2015 despite pressures from stakeholders. However, recently

Bangladesh Bank has lowered both repo and reverse repo rates by 50 basis points to reach 6.75 percent and 4.75

percent respectively. In light of persisting significant liquidity in the banking system that led to T-bills were in high

demand, which resulted in declining interest rates on instruments of all maturities as well as bank deposits and

advance.

Advance-deposit ratio (ADR) in the banking sector remained far below the approved ceiling as well as its average

value for the last eight years. AD ratio was 71.0% at the end of December 2015. Monthly weighted average call money

rate dropped to 3.69 percent in December 2015 from 8.57 percent in January 2015 reflected ample liquidity in the

banking system. The exchange rate remained stable between BDT 77 and BDT 78 per US dollar in recent months. The

difference between the unofficial market rate and the inter-bank rate has remained very small, indicating a very stable

foreign exchange market. The Bangladesh Bank (BB) remained active on the buying side of the foreign exchange

market to prevent any significant nominal exchange rate appreciation. BB interventions perpetuated foreign exchange

reserve build up, exceeding $27.49 billion by end-December 2015, which is equivalent to over six months of imports.

Total deposit liabilities of the scheduled banks increased by 12.56% during 2015 and reached BDT 7939.82 billion at

the end of December 2015. More than 70% of the total deposit shared by private sector banks (PCB) followed by state

owned banks (SCB) and foreign banks (FCB). Total credits of the scheduled banks experienced a moderate growth of

12.66% at the end of December 2015. Economic purposes classifications of private sector credit show that major

portion of bank advances belonged to trade financing at the end of 2015 followed by advances to industry sector and

working capital financing.

The interest rate spread of the banking system dropped to 4.81% in December 2015 from 5.06% in January 2015. The

weighted average lending rate dropped to 11.18% at the end of December 2015 from 12.32% at the end of January

2015. The weighted average deposit rate also declined to 6.34%, from 7.26% in the same period.

Gross non-performing loan (NPL) ratio remained almost stable to 8.79 percent at the end of December 2015 (Dec

2014: 9.69). Gross NPL of the banking sector remained high mainly because of asset quality deterioration of

Specialized Banks (SB) as well as State Owned Commercial Banks (SCB). Gross NPL ratio of SCBs reduced marginally

to 21.46% at the end of December 2015 from 22.23 % in December 2014. Gross NPL ratio of private commercial

banks (PCBs) also witnessed a marginal reduction to 4.86% at the end of December 2015 (Dec 2014: 4.98%). Foreign

commercial banks’ (FCB) asset quality deteriorated marginally as gross NPL ratio increased to 7.77% at the end of

December 2015 (Dec 2014: 7.3%). However, net NPL ratio of the Banking Industry was 2.26% at the end of December

2015.

The risk weighted capital adequacy ratio (RWCAR) for all banks decreased to 10.84 percent at the end of December

2015 from 11.35 percent at the end of December 2014 due partly to increase in NPLs. However at the end of

December 2015, RWCAR of PCBs was 12.38%, FCBs was 25.6% and SCBs was 6.35%.

Provision maintenance ratio at the end of December 2015 for PCBs was 100.48%, FCBs was 102.48% and SCBs was

67.45%. Sluggish profitability in the banking sector also continued in 2015 due to lower income from investment as

well as increase in non-performing loans. At the end of 2015, return on assets (ROA) of the FCBs was 3.05% (2014:

3.38%) and PCBs was 0.89% (2014: 0.99%).

Page | 159

Corporate lending culture is mostly collateral-driven in Bangladesh. Hence, declining property prices are not helping.

Non-performing loan situation is unlikely to improve much if general business conditions do not improve particularly

in sectors like commodity trading, ship breaking and building etc.

INDUSTRY OUTLOOK

The near term political outlook is stable as is the outlook for international commodity prices. Growth in FY16 is

projected to be sustained at 6.5 percent, driven by stronger consumption and export growth. Prolonged slower

growth in advanced and emerging markets may have an adverse impact on garment exports, thus widening the trade

deficit. However, the relatively low-income elasticity of demand for garment exports and Bangladesh’s significant

cost competitiveness would act as mitigating factors. Bangladesh is not at significant risk from contagion related to

recent turmoil in international financial markets or slower growth in China.

The monetary stance in the second half of FY16 will focus on stabilizing inflation at moderate level. Inflation is

expected to land in 6.07 percent in June 2016 from 6.20 percent in December 2015. Private sector credit is projected

to grow at 14.8 percent in June 2016 from 13.8 percent in December 2015. Public sector credit is expected to grow

at 18.7 percent from a negative number of 1.7 percent in December 2015.

CORPORATE PROFILE

International Finance Investment & Commerce Bank Limited was established in 1976 at the instance of the govt. as a

joint venture finance company named “International Finance and Investment Company Limited”. In 1983 this finance

company was converted into a commercial bank under the Companies Act 1913 (now 1994) under the name

“International Finance Investment and Commerce Bank Limited”.

The Bank went into IPO in 1986. The paid up capital of the Bank reached BDT 5,034.1 million against authorized

capital of BDT 20,000.0 million at the end of December 2015. The Government of the People’s Republic of Bangladesh

holds 32.75% of the Bank. Directors and Sponsors hold 8.48% share and the remaining 58.77% share held by the

institutions and general public. The Bank offers all kinds of banking and investment services for retail and corporate

customers through its network of 129 branches. The Bank has an Off-shore Banking Unit (OBU) located at Dhaka and

also two subsidiaries namely IFIC Securities Limited and IFIC Money Transfer (UK) Limited. Moreover, the Bank has

investment in two joint venture/associate companies in abroad namely Nepal Bangladesh Bank Limited, Nepal and

Oman International Exchange LLC, Oman. The Bank has also investment in another company in abroad namely BIB

Bank Limited, Pakistan.

4.0 OPERATIONAL PERFORMANCE (All the comparisons are based on data of 2014 unless specifically mentioned.)

4.1 Earnings & Volatility

Revenue mix of the Bank was dominated by net

interest income (on an average 42.6% for the last

five years) followed by investment income (on an

average 30.6% for the last five years). Contribution

of net interest income showed increasing trend

since 2013 resulted from increased loan portfolio

whereas contribution of investment income

decreased gradually.

In 2015, total operating income of the Bank was

dominated by net interest income (46.6% of total)

followed by investment income (29.6% of total);

commission/fees Income (17.6% of total) and other

operating income (6.2% of total).

Graph 1 Incom e Segregation of the Bank

Page | 160

Loan portfolio increased by 20.5% but interest income of the Bank grew only by 6.7% in 2015 resulted from reduced

interest on loans as well as increased NPL. On the other hand, the Bank’s interest expense increased by 5.2% mainly

resulted from the increase of deposit (13.2%). Therefore, net interest income of the Bank increased by 10.5% in 2015

and stood at BDT 3,746.2 million.

Table 1

Key Performance Indicator of the Bank Year Ended December 31

(Mil. BDT) 2015 2014 2013

Amount

Growth Amount

Growth Amount

Growth

(%) (%)

(%)

Interest Income 12,653.0 6.7 11,858.4 6.7 11,111.3 6.4

Interest Expense 8,906.8 5.2 8,466.6 (0.4) 8,499.3 11.3

Net Interest Income 3,746.2 10.5 3,391.7 29.9 2,612.0 (6.9)

Investment Income 2,375.2 (0.1) 2,377.5 9.6 2,168.4 19.5

Commission, Exchange & Brokerage 1,414.2 6.5 1,328.0 7.5 1,235.5 7.4

Other Operating Income 501.4 0.6 498.3 (1.9) 507.9 24.4

Total Operating Income 8,037.0 5.8 7,595.5 16.4 6,523.8 5.6

Total Operating Expense 4,391.3 (0.7) 4,422.7 23.7 3,575.9 16.6

Pre Provision Profit 3,645.7 14.9 3,172.8 7.6 2,947.9 (5.2)

Provision 2,030.7 309.7 495.7 106.4 240.2 (86.0)

Profit Before Taxes 1,615.0 (39.7) 2,677.1 (1.1) 2,707.7 94.8

Provision for tax 728.0 (35.7) 1,132.4 (16.9) 1,362.2 378.1

Profit After Tax 887.0 (42.6) 1,544.7 14.8 1,345.5 21.7

Investment income of the Bank slightly reduced (by 0.1%) in 2015 and reached BDT 2,375.2 million. Commission,

exchange & brokerage income of the Bank grew by 6.5% in 2015 and reached BDT 1,414.2 million. Major drivers of

commission, exchange & brokerage income were remittances, LC, letter of guarantee etc. Other operating income of

the Bank increased to BDT 501.4 million in 2015 from BDT 498.3 million in 2014 contributed mainly by loan

processing fees and service charges on accounts. As an overall effect, total operating income increased by 5.8% in

2015 and reached BDT 8,037.0 million.

Table 2

Efficiency Ratios of the Bank Year Ended December 31

Particulars 2015 2014 2013 2012 2011

Cost to Income Ratio2 (%) 54.6 58.2 54.8 49.7 51.4

Staff Cost to Income Ratio (%) 27.6 32.4 29.1 28.8 28.4

Total operating expense of the Bank decreased by 0.7% in 2015 and reached BDT 4,391.3 million. Around 50.6% of

operating expenses comprised of personnel expenses and the rest are overhead expenses. The Bank’s personnel

expenses decreased by 9.8%, whereas other operating expenses increased by 10.7%. Therefore, cost to income ratio

of the Bank decreased by 3.6 percentage points to 54.6% in 2015 which is still higher than the PCB industry average.

Staff cost to income ratio of the Bank also decreased by 4.8 percentage points in 2015.

Profit before provision of the Bank increased by 14.9% in 2015 and stood at BDT 3,645.7 million. The Bank’s provision

expense increased substantially by 309.7% in 2015 resulted from increased specific provision due to deterioration of

asset quality. Tax expense was BDT 728.0 million in 2015. Profit after tax decreased by 42.6% in 2015 and reached

BDT 887.0 million.

2 Excluding interest expense

Page | 161

4.2 Profitability

Table 3

Profitability Ratios of the Bank Year Ended December 31

Particulars 2015 2014 2013 2012 2011

Net Interest Margin 3.1 3.2 2.9 3.7 3.4

Return on Average Asset (after tax) 0.5 1.1 1.1 1.1 0.9

Return on Average Equity (after tax) 8.0 15.7 16.0 15.4 12.1

Return on Risk Weighted Asset 0.8 1.5 1.6 1.4 1.0

Asset Utilization 4.8 5.3 5.3 6.0 6.9

Net Profit Margin 11.0 20.3 20.6 17.9 13.4

Leverage Ratio (times) 15.0 14.6 14.6 14.4 13.0

Net interest margin of the Bank remained stable in 2015. Both ROAA and ROAE decreased to 0.5% and 7.7%

respectively in 2015. Due to substantial increase of provision expense, net profit margin decreased by 9.3 percentage

points. Profitability of the Bank is low in respect of risk return perspective having a return of 0.8% on risk weighted

assets in 2015. In 2015, average asset of the Bank was 15.0 times of average equity.

4.3 Asset Evaluation Table 4

Asset Composition of the Bank Year Ended December 31

(Mil. BDT) 2015 2014

Amount % Growth (%) Amount % Growth (%)

Money at Call - - (100.0) 1,450.0 0.9 -

Cash in hand and with BB 11,861.4 6.7 14.1 10,398.8 6.7 7.4

Balance with other Bank & FI's 5,710.5 3.2 (52.6) 12,042.8 7.7 20.1

Investment 28,497.9 16.0 24.7 22,845.3 14.6 7.9

Loans and advances 123,268.7 69.1 20.5 102,282.1 65.4 21.6

Fixed Assets 3,230.4 1.8 10.3 2,929.3 1.9 22.9

Other Assets 5,391.7 3.0 34.2 4,016.8 2.6 (6.8)

Non-Banking Assets 373.5 0.2 - 373.5 0.2 -

Total 178,334.0 100.0 14.1 156,338.6 100.0 18.4

In 2015, the Bank’s total asset grew by 14.1% and reached BDT 178,334.0 million. In 2015, the Bank’s asset

composition was strongly dominated by loans & advances (69.1% of total assets) followed by investment (16.0% of

total assets), cash in hand & with Bangladesh Bank (6.7% of total assets), balance with other banks and FIs (3.2% of

total assets). On an average, loans and advances dominated the asset structure by 67.2% of total for the last five

years. Other assets of the Bank were BDT 5,391.7 million at the end of 2015 major portion of which includes advance,

deposit & prepayment; accrued interest on investment & other income, deferred tax assets, investment in subsidiaries

etc. The Bank’s Risk weighted asset to total asset was 65.8% in 2015 (2014: 71.4%).

4.4 Investment

Table 5

Investment Portfolio of Bank Year Ended December 31

(Mil. BDT) 2015 2014

Amount % of Total Amount % of Total

Government Securities & Bonds 23,596.9 82.8 17,217.3 75.4

Others 4,901.0 17.2 5,628.0 24.6

Quoted Shares 2,926.5 10.3 3,068.3 13.4

Unquoted Shares 68.8 0.2 68.8 0.3

Mutual Funds 268.0 0.9 268.0 1.2

In Share (Outside of Bangladesh) 1,637.7 5.7 1,642.8 7.2

Others - - 580.0 2.5

Total 28,497.9 100.0 22,845.3 100.0

Page | 162

The Bank’s investment portfolio increased by 24.7% in 2015 and reached BDT 28,497.9 million. In 2015, the Bank’s

investment portfolio was dominated by high quality liquid asset (like Government Securities) followed by quoted

shares. In 2015, 82.8% of total investment was in Government securities (BDT 23,596.9 million). The purpose of the

investment in government security was mainly to meet regulatory requirement as well as remain liquid. IFIC Bank held

BDT 2,926.5 million investments in quoted shares of 18 different companies including bank, financial institutions

and insurance companies. The market value of the quoted share was BDT 2,544.4 million against the cost price of

BDT 2,926.5 million as of 31 December 2015. The Bank maintained BDT 394.0 million provisions for these

diminishing values of investment. The Bank realized capital gain of BDT 24.6 million from sale of shares of listed

companies in 2015. Under the unquoted category, the Company holds shares of Karma Sangsthan Bank, Central

depository Bangladesh Limited and Energy Pack Power Company Ltd. The cost price of unquoted shares was BDT 68.8

million as of 31 December 2015. The investment yield of the Bank decreased to 9.3% in 2015 from 10.8% in 2014.

4.5 Credit Risk

CRAB reviews the fundamentals of managing credit risk including qualitative and quantitative analysis as a part of

credit risk evaluation. Qualitative evaluation includes credit policy, credit approval and monitoring. CRAB also

addresses intrinsic risk, concentration risk as well as large loan exposures.

4.6 Credit Approval Process

The Bank has its structured and established process for approving new credits as well as enhancement of existing

credits. Board of Directors is the supreme authority to approve all sorts of credit policies and maximum lendable

credit facility as per Bangladesh Bank’s directives. Management can approve credit facility up to certain limit for

speedy disposal of client’s proposal as per delegation allowed by the Board. Credit proposals are generally initiated

by the relationship manager of Branch. After detailed analysis of the proposal and documentation, branch forward

the proposals to head office. In head office, corporate banking division thoroughly scrutinizes the proposals from the

business point of view and then further reviews by the credit risk management division from the risk point of view

and processes the proposals for approval.

4.7 Credit Quality

The Bank’s asset quality deteriorated significantly during the last couple of years. Gross NPL (in absolute amount)

increased by 57.3% in 2015 and reached BDT 7,962.1million resulted from increased fresh NPL. The impact of high

growth in fresh NPL (7.3% of total loans) was partly offset by rescheduling of loans as well as from substantial growth

of loans & advances. The Bank had rescheduled loans amounting BDT 3,470.0 million (2.8% of total loans) in 2015.

Recovery of bad loans was good in 2015 (BDT 1,394.6 million). The Bank had written off loan amounting BDT 1,224.0

million in 2015. As an overall effect, gross NPL ratio of the Bank was 6.5% at the end of 2015. In 2015, net NPL of the

Bank was 19.5% of Tier I capital (2014: 4.3%).

Table 6

NPL Movement of the Bank Year Ended December 31

Mil. BDT 2015 2014 2013

Particulars Amount

% of Total Amount

% of Total Amount

% of Total

Loans Loans Loans

Opening balance of NPL 5,061.1 4.1 3,168.1 3.1 4,095.5 4.9

Add: Fresh NPL Generation 9,008.6 7.3 4,525.5 4.4 3,940.6 4.7

Less: Cash Recovery 1,394.6 1.1 876.9 0.9 1,200.3 1.4

Less: Rescheduling 3,470.0 2.8 1,464.4 1.4 2,339.2 2.8

Less: Write off 1,224.0 1.0 289.2 0.3 1,316.0 1.6

Less: Waiver 19.0 0.02 2.2 0.002 12.6 0.01

Closing Balance of NPL 7,962.1 6.5 5,061.1 4.9 3,168.1 3.8

Out of total NPL, 68.7% belonged to bad & loss category followed by doubtful category (16.1%) and sub-standard

category (15.2%). SMA to total loans and advances of the Bank was high at 8.0% at the end of 2015 which may further

increase NPL. Gross NPL to total equity and loan loss reserve increased to 49.4% in 2015 from 35.8% in 2014.

Page | 163

In 2015, the Bank’s provision requirement for classified loans and advances was BDT 2,697.9 million against which

the Bank kept BDT 2,699.9 million as specific provision. In addition, the Bank maintained BDT 1,761.0 million as

general provision against unclassified loans and advances as well as off balance sheet exposures. There was an excess

provision of BDT 3.4 million at the end of 2015. Gross NPL coverage ratio of the Bank was 56.0% in 2015 (2014:

69.6%).

Table 7

Loan Loss Provision of the Bank

Mil. BDT 2015 2014 2013

Particulars Amount % of Total Amount % of Total Amount % of Total

Loans (%) Loans (%) Loans (%)

General Provision Held3 1,761.0 1.4 1,555.0 1.5 1,241.0 1.5

Specific Provision Held 2,699.9 2.2 1,966.4 1.9 1,620.1 1.9

Total Provision Held 4,460.9 3.6 3,521.4 3.4 2,861.1 3.4

Required Provision 4,457.5 3.6 3,412.9 3.3 2,488.6 3.0

Provision surplus 3.4 0.003 108.5 0.1 372.5 0.4

CRAB looks at pre-provision profit (PPP) to net loans for assessing the Bank’s ability to survive against unfavorable

circumstances in future. The Bank’s PPP to net loan ratio in 2015 was 3.1% (2014: 3.2%). Pre-provision profit to net

loans of the Bank indicates that 3.1% of currently performing loans can be written off without charging on reserves

and equity.

4.8 Loan Portfolio Analysis

The Bank’s loans and advances portfolio grew by 20.5% and reached BDT 123,268.7 million in 2015. Product wise

concentration shows that, term loan dominated the loan portfolio in 2015 having 39.5% of total followed by cash

credit (22.1% of total) and overdraft (20.6% of total). On the other hand, sectors wise concentration distribution shows

that loans and advances portfolio was dominated by readymade garments sector financing (14.4% of total) followed

by real estate industry financing (12.0% of total at the end of 2015. Sector wise NPL rate depicts that ship breaking

industry financing experienced highest NPL rate with 44.4% in 2015.

Table 8

Concentration of Loans and Advances (Mil. BDT) For the period ended December 2015

Particulars Amount (A)

% of Total Sector wise Sector wise

Loans NPL (B) NPL Rate

Agriculture 1,488.9 1.2% 27.4 1.8%

Readymade Garments 17,745.3 14.4% 476.1 2.7%

Textile 5,534.6 4.5% 285.4 5.2%

Ship Building 622.3 0.5% - 0.0%

Ship Breaking 1,668.3 1.4% 740.0 44.4%

Other Manufacturing Industry 13,947.8 11.3% 90.7 0.7%

Fuel & Energy 4,540.7 3.7% - 0.0%

Construction 3,027.7 2.5% 148.9 4.9%

Real Estate – Commercial 10,460.4 8.5% 848.5 8.1%

Real Estate - Residential 4,295.4 3.5% 41.2 1.0%

Capital Market Institutions 1,638.0 1.3% - 0.0%

Non-Bank Financial Institutions 0.9 0.0% - 0.0%

Transport, Storage & Communication 5,875.8 4.8% 793.3 13.5%

Trade Service 6,597.8 5.4% 583.2 8.8%

Consumer Credit 8,109.4 6.6% 165.8 2.0%

SME & Others 37,715.4 30.6% 3,761.6 10.0%

Total 123,268.7 100.0 7,962.1 6.5

3 Including off balance sheet exposure

Page | 164

4.9 Large Loan Exposure

As of 31 December 2015, the Bank’s top 50 loan exposures (both funded & non-funded) amounted to BDT 67,521.5

million against approved facilities of BDT 77,639.5 million. The Bank has relatively higher credit concentrations in

terms of top loan exposure. The Bank’s top 50 funded loans and advances in 2015 held 54.8% of total loan portfolio

and 6.4 times of core capital of the Bank. Among those 50 loans, all were reported as unclassified at the end of 2015.

The Bank had sanctioned 29 large loans amounting BDT 60,163.2 million each above 10% of the total capital of the

Bank in 2015.

4.10 Capital Adequacy

Table 9

Capital Structure of the Bank Mil. BDT 2015 2014 2013

Particulars Amount % of RWA Amount % of RWA Amount % of RWA

Tier 1 Capital 10,507.6 9.0 9,695.0 8.7 8,324.1 9.0

Tier 2 Capital 1,305.5 1.1 1,613.5 1.4 1,306.7 1.4

Total Capital 11,813.1 10.1 11,308.4 10.1 9,630.8 10.4

Required Capital 11,731.4 10.0 11,157.4 10.0 9,291.5 10.0

Capital Surplus/ (shortfall) 81.7 0.1 151.1 0.1 339.3 0.4

At the end of 2015, total capital of the Bank was BDT 11,813.1million (2014: BDT 11,308.4 million). The Bank’s equity

to total deposit & borrowing was 7.6% in 2015 (2014: 7.9%). The Bank was marginally capitalized in respect of risk

weighted capital adequacy ratio with 10.1% against regulatory requirement of 10.0% under Basel III at the end of

2015. The Bank conducted stress testing based on “simple Sensitivity and Scenario Analysis”. Stress test revealed that

the Bank’s capital adequacy ratio may be affected if there is significant increase in NPLs due to default of top large

loan borrowers.

Table 10

RWA Distribution of the Bank Mil. BDT 2015 2014 2013

Particulars Amount % of Total Amount % of Total Amount % of Total

Credit Risk 100,698.1 85.8 95,081.0 85.2 77,860.2 83.8

Market Risk 5,404.1 4.6 6,329.0 5.7 6,534.0 7.0

Operational Risk 11,212.3 9.6 10,164.0 9.1 8,521.2 9.2

Total Risk Weighted Asset 117,314.4 100.0 111,574.0 100.0 92,915.4 100.0

Risk weighted asset of the Bank grew by 5.1% in 2015 and reached BDT 117,314.4 million mainly resulted from

growth of credit risk due to the 20.5% growth of loans & advances. The Bank’s risk weighted asset composition under

credit risk was dominated by corporate loans & advances. The risk weighted asset of the rated clients was BDT

32,596.7 million as of 31 December 2015 against actual exposure of BDT 39,717.6 million. It is observed that 68.8%

funded exposure of the rated clients is single A (Bangladesh Bank Rating Grade 2) and above categories. The details

of the rated clients are given in the Annexure 2 (Table 2.1).

4.11 Funding and Liquidity

Table 11

Funding Mix of the Bank Year Ended December 31

(Mil. BDT) 2015 2014

Particulars Amount % Growth (%) Amount % Growth (%)

Current deposit 17,411.5 11.9 12.6 15,464.8 11.9 15.8

Bills payable 1,473.6 1.0 (21.4) 1,875.0 1.4 19.1

Savings Deposit 24,496.1 16.7 33.4 18,366.5 14.2 32.2

Term Deposit/Fixed deposit 103,438.5 70.5 10.0 94,039.6 72.5 15.2

Total Deposit & Borrowing 146,819.7 100.0 13.2 129,745.8 100.0 17.5

Page | 165

Total deposit of the Bank grew by 13.2% in 2015 and reached BDT 146,819.7 million. In 2015, the Bank’s total deposit

was dominated by term deposit (70.5% of total) followed by savings deposit (16.7% of total) and current deposit

(11.9% of total). The average cost of deposit & borrowing was 6.6% in 2015 (2014: 7.3%). However, the Bank’s low

cost deposit base was low (on an average 26.4% for the last five years) compared to its large network of branches.

Table 12

Month wise Call Market Operation of the Bank

(Mil. BDT) --For the Year 2015--

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Call Lending 1,614.2 648.6 69.0 506.7 293.6 815.7 1,056.8 1,942.6 11.7 59.4 202.7 252.6

(Monthly Average)

Avg. Interest Rate (%) 8.1 7.9 8.0 7.4 6.8 5.1 5.1 5.0 5.1 4.8 3.5 2.4

Call Borrowing - 41.8 320.0 1.3 251.6 - - - 615.7 136.1 320.0 425.5

(Monthly Average)

Avg. Interest Rate (%) - 7.0 7.3 7.0 5.6 - - - 5.0 5.1 3.1 3.6

Net Lending/(Borrowing) 1,614.2 606.8 (251.0) 505.3 41.9 815.7 1,056.8 1,942.6 (604.0) (76.8) (117.3) (172.9)

The Bank actively participated in call money market and was the net lender throughout the year 2015 except in the

month of March, September, October, November and December mainly to take arbitrage advantage of lower interest

rate. Average lending rate was 5.8% against average borrowing rate was 5.5% in 2015. The Bank earned BDT 64.3

million as interest from call market operation whereas interest expense was BDT 24.8 million for the same period.

Loans and advances to deposit ratio of the Bank was 82.5% at the end of 2015 with a monthly average of 79.4%.

Table 13

Liquidity Profile of the Bank

(Mil. BDT) --For the Year 2015--

Particulars

Up to 1-3 3-12 1-5 years

Above 5 Total

1 Month Months

Months

years

Assets 40,072.6 31,710.0 40,124.1 37,340.2 29,087.1 178,334.0

Liabilities 25,880.0 29,727.4 39,174.0 45,876.2 26,022.2 166,679.7

Net Liquidity Gap 14,192.6 1,982.6 950.1 (8,536.0) 3,064.9 11,654.2

Cumulative Liquidity Gap 14,192.6 16,175.2 17,125.3 8,589.3 11,654.2 23,308.4

Gap as % of Liability (%) 54.8 6.7 2.4 (18.6) 11.8 7.0

The asset liability maturity of the Bank shows that the Bank possessed positive net liquidity gap for all maturity

buckets except 1-5 years bucket. The Bank’s liquid asset to deposit & borrowings was 26.7% in 2015 (2014: 30.4%).

4.12 Interest Rate Risk The following exhibit shows the maturity wise interest sensitive asset and liabilities and thereby the exposures to

interest rate risk of the Bank. The Bank had asset sensitive positions in all maturity buckets up to 12 months except

1-3 months maturity bucket. Gap indicates that the Bank will be benefited on increasing interest rates and will suffer

on decreasing interest rate scenario marginally. For 1 percentage point interest rate increase the Bank will gain BDT

18.3 million and will lose the same amount for 1 percentage point interest rate decrease.

Table 14

Interest Rate Risk Exposure of the Bank Mil. BDT --For the Year 2015--

Particulars

Up to 1 1- 3 3-6 6-12

Month Months Months Months

Interest Sensitive Assets 39,157.3 26,270.3 12,622.7 25,245.4

Interest Sensitive Liabilities 25,494.8 39,647.5 10,793.7 21,587.5

Gap 13,662.5 (13,377.2) 1,828.9 3,657.9

Cumulative Earning impact (1% point int. rate increase) 11.4 (22.3) 4.6 18.3

Cumulative Earning impact (1% point int. rate decrease) (11.4) 22.3 (4.6) (18.3)

Page | 166

4.13 Foreign Exchange Risk

As a commercial bank, the Bank is exposed to potential changes in earnings arising due to changes in market price

of currency and the position in the currency that is held during the changes. In addition to Bangladesh Bank guide

line, the Bank has also developed and follow different strategies to handle foreign exchange risk by setting limits on

net open positions by currencies, mismatch limits by currencies and time buckets of forward foreign exchange

transactions, over-all gross limit for FWD transaction, maximum loss limit per day, per month and value at risk limits.

Table 15

Foreign Currency Exposure of the Bank

(Mil. BDT) --As of December 31, 2015--

Particulars Assets Liabilities Overall Net Positions Overall Net Position*/Core Capital (%)

USD 1,131.29 1,112.12 19.16 0.18

EURO 4.73 5.10 (0.37) 0.00

AUD 0.40 0.00 0.40 0.00

CAD 0.00 0.00 0.00 0.00

GBP 5.88 6.07 (0.20) 0.00

CHF 0.04 0.07 (0.03) 0.00

JPY 0.02 0.00 0.02 0.00

* Considering absolute value

As of 31st December 2015, the Bank possessed sum of overall net positions in different currencies resulted in net

liability position of BDT 18.99 million which was 0.2% of core capital of the Bank. The Bank’s overall net open position

was dominated by US Dollar being 0.2% of core capital. Foreign currency dealing profit of the Bank was BDT 735.9

million in 2015 (2014: BDT 645.6 million).

4.14 Off Balance Sheet Exposures

Table 16

Off Balance Sheet Exposure of the Bank --Year Ended December 31--

Mil. BDT 2015 2014

Particulars Amount % of Total Assets Amount % of Total Assets

Acceptances and endorsements 14,210.8 8.0 17,819.0 11.4

Letter of guarantee 9,706.6 5.4 6,644.8 4.3

Letter of credit 14,800.3 8.3 14,473.7 9.3

Bills for Collection 9,061.3 5.1 8,886.9 5.7

Total 47,779.0 26.8 47,824.4 30.6

The Bank’s total off balance sheet portfolio decreased by 0.1% in 2015 and reached BDT 47,779.0million. Total off

balance sheet portfolio was 26.8% of total asset of the Bank in 2015. In 2015, off balance sheet portfolio was

dominated by letter of credit (8.3% of total) followed by acceptances and endorsements (8.0% of total), letter of

guarantee (5.4% of total) and bills for collection (5.1% of total). Total off balance sheet exposures of the Bank was 4.0

times of its total capital by the end of December 2015 (2014: 4.2 times).

4.15 Market Share and Growth Table 17

Market Share Year Ended December 31

% 2015 2014 2013 2012 2011

Loans & Advances (%) 2.0 1.9 1.8 1.8 1.7

Deposits (%) 1.8 1.8 1.8 1.7 1.6

In 2015 the Bank’s market share in terms of loans & advances was 2.0% which was 1.9% in 2014. The Bank’s market

share in terms of deposits was 1.8% in 2015.

Page | 167

5.0 BRANCH NETWORK Presently the Bank has 129 branches across the country. Of the total branches, 96 branches were located in urban

areas and 26 in rural areas. Out of the total, 01 branch was functioning as offshore banking unit. 29 of the total

branches were loss incurring as of December 2015. Currently the Bank has 59 own and more than 2 000 no. of ATMs

are shared with Q-cash network.

6.0 MANAGEMENT

6.1 Senior Management Presently, the Management team of IFIC is headed by Managing Director Mr. M Shah A Sarwar. Mr. Sarwar joined IFIC

Bank as Managing Director in December 2012. He has more than 31 years of banking experience. Prior to joining as

Managing Director, he was the Managing Director & CEO of Trust Bank Ltd. The Managing Director, Deputy Managing

Directors and Head of Divisions are responsible for achieving business goals and overseeing the day to day operation.

The Managing Director is assisted by a Senior Management Group consisting of Deputy Managing Directors and Head

of Divisions who supervise operation of various divisions centrally and co-ordinates operation of branches.

6.1.1 Management Committee (MANCOM): The Management Committee of IFIC comprises of 16 members holding key positions in the Management of the Bank.

The Committee is headed by the CEO & Managing Director. The Committee sits at least once in every month to review

and evaluate strategic operational issues of the Bank, identify specific problems which need to be immediately

attended. Generally, the MANCOM is concerned with major decision-making in the Bank, planning and framing of

policy guidelines.

6.1.2 Asset Liability Committee (ALCO): Asset Liability Committee comprising of 10 (ten) members of the Senior

Executives is headed by the CEO & Managing Director to look into all operational functions and Risk Management of

the Bank. The VP & Head of Treasury acts as the Member Secretary of the Committee. To address all the risk elements

of the balance sheet, monthly ALCO meetings were conducted. In 2015, 12 ALCO meeting were held.

6.2 Human Resource Management The HR division of the Bank comprises of 19 members and is headed by a senior level executive of the Bank. By the

end of 2015, total human resource of the Bank was 2,489 (2014: 2,527). During 2015, 115 employees retired or left

the organization, while 68 new employees joined. The Bank has defined HR policies including recruitment, training &

development, promotion, leave, transfer, and disciplinary action policy. Usually internal recruitment procedures are

considered to fill up the mid and top management positions, while entry-level positions are filled through competitive

recruitment tests.

The Bank organizes both internal and external training programs to enhance the skills and knowledge of its

employees. The Bank provides in-house training, both on the job and off the job through the Bank’s Training Academy. In 2015, 1,866 were trained in different courses. Main training activities consist of in-depth foundation

programs for entry level Management Trainees. Specialized training programs in the areas like general banking,

advance, foreign exchange, marketing and accounts etc. are also organized by the Academy depending on

requirement. In addition to conducting courses internally, the training academy also selects candidates for nomination

to various courses conducted by distinguished training organizations in the country including Bangladesh Bank

Training Academy and Bangladesh Institute of Bank Management as well as in abroad.

6.3 Automation Status The IT division of the Bank comprises of 49 members which comprises system analyst, engineer, network

administrator, programmer etc. The division is headed by a senior official of the Bank. The Bank uses Misys Banking

Solution as the platform for financial and management reporting. Real time online banking system is supported by

optic fiber connectivity. The Bank also uses other software for management information, regulatory requirement,

activity monitoring and other operational processing. The Bank has launched Debit Card, Credit Card and Prepaid

Card. The Bank has also developed and implemented loan origination software to facilitate online loan proposal

processing for consumer finance products. The Bank continuously updates these reporting systems to comply with

enhancing reporting requirements. The Bank’s ‘Disaster Recovery Site’ is situated at Uttara.

Page | 168

7.0 CORPORATE GOVERNANCE To assess Bank’s corporate governance practices CRAB evaluates the quality of financial reporting and disclosures,

strength of internal control system and internal audit function; induction of professionally competent, independent

non-executive directors on corporate Board, formation of audit committee; delegation of power to executives and

staff; protection of shareholders’ right etc. The Bank has addressed most of the issues of corporate governance for

strengthening organizational strength. The Bank has set up Executive Committee and Audit Committee in this regard.

The Bank has appointed an independent director which is required by SEC. IFIC Bank has complied with all conditions

applicable to them imposed by the Bangladesh Securities & Exchange Commission as of December 2015.

7.1 Financial Reporting and Disclosures The financial statement of the Bank was audited by reputed chartered accountants firm M. J. Abedin & Co. According

to them the financial statements of the Bank were prepared and presented in accordance with Bangladesh Financial

Reporting Standards, the Bank Companies Act 1991, the Companies Act 1994, the Securities and Exchange Rules

1987 and other applicable laws and regulations. According to the auditor the financial statements gave a true and

fair view of the state of the Bank as at December 31, 2015.

7.2 Board of Directors IFICs’ Board is comprised of 07 members. The Board is headed by Mr. Salman F Rahman as Chairman. The Board of

Directors is responsible for the strategic planning and overall policy guidelines of the Bank. During 2015, the Board

conducted 27 meetings. The Board formed 2 (two) Committees, namely Executive Committee and Audit Committee.

7.2.1 Executive Committee Presently, the Executive Committee of the Board has 3 (three) members. Mr. A. R.M. Nazmus Sakib is the Chairman

of the committee. The Executive Committee reviews all the proposals for loans and advances that do not fall within

the discretion of the Managing Director. It is also responsible for administration, investment aspect, expansion of

business, property purchase of the Bank, rescheduling of the loans etc. The Board confirms the decision of all

Executive Committee meetings and assesses the operational results. In 2015, the committee held only 01 meeting.

7.2.2 Audit Committee There is an Audit Committee in the Board to oversee compliance of major regulatory and operational issues. The

Audit Committee consists of 3 (three) members including one independent director and company secretary. During

2015, 10 (ten) meetings were held. The Committee is headed by Mr. Monirul Islam as Chairman.

7.3 Corporate Social Responsibility In 2015, the Bank spends BDT 38.0 million for conducting CSR activities. Presently, the Bank CSR activities are

conducted in the area of disaster relief, education, environment, health, sports, agriculture, art & culture ect. In 2015,

the Bank’s major portion of CSR contribution was in health (65.7%) followed by disaster relief (29.9%) and social

development (4.4%).

8. SUBSIDIARIES 8.1 IFIC Securities Limited IFIC Securities Limited was incorporated in November 2010 as a public limited company to carry out the business of

stock brokers/stock dealers and other related business in connection with the dealing of listed securities. The

principal activity of the Company includes issue management, portfolio management, underwriting and corporate

advisory etc. Capital of the Company was BDT 800.0 million at the end of 2015. As of 31st December 2015, the

Company had BDT 3,694.8 million margin loans outstanding with clients. The Company has loans amounting BDT

1,295.4 million from IFIC bank and BDT 292.6 million from other banks. Profit after tax of the Company was BDT

10.0 million in 2015 (2014: 22.6 million)

8.2 IFIC Money Transfer (UK) Limited IFIC Money Transfer (UK) Limited was incorporated on September 2010 and commenced its operation from August

2011. Principal activity of the Company is money service business including international money transfers. Net profit

of the Company was GBP 50,169.0 in 2015 (2014: GBP 10,063.0).

Page | 169

ANNEXURE 1: CORPORATE INFORMATION

Table 1.1

Composition of the Shareholding

31 December 2015 31 December 2014

Category No. of Shares held Value (Mil. BDT) % No. of Shares held Value (Mil. BDT) %

Sponsors 32,642,018 326.4 6.48 28,384,369 283.8 6.48

Directors 10,071,085 100.7 2.00 21,144,946 211.4 4.83

Government 164,860,306 1,648.6 32.75 143,356,788 1,433.6 32.75

Foreign Investors 2,148,621 21.5 0.43 1,862,135 18.6 0.43

Institutions 107,931,225 1,079.3 21.44 85,229,919 852.3 19.47

General Investors 185,759,162 1,857.6 36.90 157,771,771 1,577.7 36.04

Total 503,412,417 5,034.1 100.0 437,749,928 4,377.5 100.0

Table 1.2

Board of Directors and Shareholding position as on 31 December 2015 Name of Director Position % of Share as on 31 Dec 2015

Mr. Salman F Rahman Chairman 2.00*

Mr. Monirul Islam Independent Director -

Mr. Anwaruzzaman Chowdhury Independent Director -

Mr. Jalal Ahmed** Government Nominated Director

Mr. A. R. M. Nazmus Sakib** Government Nominated Director 32.75

Mr. Arijit Chowdhury** Government Nominated Director

M. Shah Alam Sarwar Managing Director & CEO -

* The ownership of 10,002,532 nos. shares (1.987%) i.e. 807,470 nos. paper shares plus 1,195,062 nos. bonus

shares kept in Suspense Account is pending with the Appellate Division of the Supreme Court in Civil Misc. Petition

No. 417 of 2009.

** Directors nominated by the Ministry of Finance, Government of People’s Republic of Bangladesh against its holding

32.75% shares in the Bank. However, Mr. Arijit Chowdhury was withdrawn from the Board of the Bank on 06 January

2016.

ANNEXURE 2: RATING HISTORY OF IFIC BANK LIMITED

Date of Rating Long Term Short Term Outlook

09 July 2015 AA2 ST-2 Positive

30 June 2014 AA2 ST-2 Stable

30 June 2013 AA2 ST-2 Stable

Page | 170

ANNEXURE 3: RELATED TABLES

Table 2.1

Details of Rated Corporate Clients of the Bank (Risk Weighted Assets for Credit Risk Balance Sheet Exposures) --At the end of 31 December--

Mil. BDT 2015 2014

BB Rating Grade Loan Outstanding RWA BB Rating Grade Loan Outstanding RWA

1 4,761.8 952.4 1 4,657.5 931.5

2 13,335.0 6,667.5 2 13,626.0 6,813.0

3,4 8,196.9 8,196.9 3,4 8,727.5 8,727.5

5,6 - - 5,6 - -

Unrated 13,424.0 16,780.0 Unrated 12,420.7 15,525.9

Total 39,717.6 32,596.7 Total 39,431.8 31,998.0

Table 2.2

Month wise Loans to Deposit Ratio of the Bank

(Mil.BDT) --For the Year 2015--

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Loans 99,519 98,869 103,130 102,836 105,503 109,505 109,469 108,722 110,332 110,674 112,554 121,372

Deposit 130,369 125,019 126,946 129,963 130,421 133,966 136,242 139,263 142,464 140,676 144,702 147,118

Loans to Deposit 76.3 79.1 81.2 79.1 80.9 81.7 80.3 78.1 77.4 78.7 77.8 82.5

Table 2.3 Structural Liquidity Profile of the Bank

(Mil. BDT) --As of December 31, 2015--

Particulars Up to 1 month 1-3 months 3-12months 1-5 years Above 5 years

Net Mismatch 1,613.0 (1,678.3) 669.8 (4,520.0) 4,065.4

Cumulative Net Mismatch 1,613.0 (65.3) 604.4 (3,915.6) 149.8

Table 2.4 Cost of Funding

--For the Year Ended 31 December--

(%) 2015 2014 2013

Yield 10.5 11.7 13.1

Cost of Deposit 6.6 7.3 8.7

Cost of Fund 5.4 6.1 7.1

Spread 5.3 5.9 6.1

Page | 171

ANNEXURE 4: COMPARISON WITH INDUSTRY

Graph 1 Return on Average Asset (Before Tax) (%)

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -

2011 2012 2013 2014 2015

Industry Avg

Industry Percentile 25


IFIC

Graph 2 Net Interest Margin (%)

6.0

5.0

4.0 3.0

2.0

1.0

0.0

2011 2012 2013 2014 2015

Industry Median


Industry Percentile 75 IFIC

Graph 3 Risk Weighted Capital Adequacy Ratio (%)

15.0

14.0

13.0

12.0

11.0

10.0

9.0

8.0 2011 2012 2013 2014 2015

Industry Avg Industry Percentile 25


Graph 4 Cost to Income Ratio (%)

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 -

2011 2012 2013 2014 2015

Industry Avg



Graph 5

Gross NPL ratio

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0 2011 2012 2013 2014 2015

Industry Avg



Graph 6 Average Cost of Deposit and Borrowing (%)

11.0

10.0

9.0

8.0

7.0

6.0

5.0

4.0 2011 2012 2013 2014 2015

Industry Avg Industry Percentile 25


Page | 172

ANNEXURE 5: DEFINITION, FORMULA & ASSUMPTIONS

Definition & Formula 1. Loans and advances include Loans, Cash Credit, Overdrafts, Bill purchased and discounted unless mentioned

otherwise.

2. Deposits include Deposits & other accounts and bills payables unless mentioned otherwise.

3. Average Assets, Average investment assets, Average Earning Assets and Average equity are calculated on the basis

of opening and year end balances.

4. Interest Earning Assets include total loans & advances, money at call & short notice, balance with other banks &

FIs.

5. Net Loans & Advances has been calculated by deducting Specific Provision and Interest Suspense Accounts from

Gross Loans & Advances.

6. Net Interest Margin = Net interest income / Average Interest Earning Assets.

7. Net Profit Margin = Net Profit after Tax / Operating Income

8. Asset Utilization = Operating Income / Average Assets

9. Leverage Multiplier = Average assets / Average Equity

10. Yield on Average Investment = Income from Investment / Average Investment Assets

Assumptions for Interest Risk Exposure 1. Assets and liabilities are re-priced on the first day of the re-pricing interval and, therefore, that interest rate

change affects the whole period.

2. Assets and liabilities are rolled over into the same types of instruments with the same maturities.

Page | 173

CRAB RATING SCALES AND DEFINITIONS - LONG TERM: BANKS RATING DEFINITION

AAA Commercial Banks rated 'AAA' have extremely strong capacity to meet their

Triple A financial commitments. 'AAA' is the highest issuer credit rating assigned by

(Extremely Strong Capacity & CRAB. AAA is judged to be of the highest quality, with minimal credit risk.

Highest Quality)

AA1, AA2, AA3* Commercial Banks rated 'AA' have very strong capacity to meet their financial

Double A commitments. They differ from the highest-rated Commercial Banks only to a

(Very Strong Capacity & Very small degree. AA is judged to be of very high quality and is subject to very low

High Quality) credit risk.

Commercial Banks rated 'A' have strong capacity to meet their financial

A1, A2, A3 commitments but are somewhat more susceptible to the adverse effects of

Single A changes in circumstances and economic conditions than Commercial Banks in

(Strong Capacity & High

Quality) higher-rated categories. A is judged to be of high quality and are subject to low

credit risk.

BBB1, BBB2, BBB3

Commercial Banks rated 'BBB' have adequate capacity to meet their financial

commitments. However, adverse economic conditions or changing Triple B

circumstances are more likely to lead to a weakened capacity of the Commercial (Adequate Capacity & Medium

Banks to meet their financial commitments. BBB is subject to moderate credit Quality)

risk.

Commercial Banks rated 'BB' are less vulnerable in the near term than other

BB1, BB2, BB3 lower-rated Commercial Banks. However, they faces major ongoing

Double B uncertainties and exposure to adverse business, financial, or economic

(Inadequate Capacity & conditions, which may lead to the Commercial Bank’s inadequate capacity to

Substantial Credit Risk) meet their financial commitments. BB is judged to have speculative elements

and is subject to substantial credit risk.

Commercial Banks rated 'B' are more vulnerable than the Commercial Banks

B1, B2, B3 rated 'BB', but the Commercial Banks currently have the capacity to meet their

Single B financial commitments. Adverse business, financial, or economic conditions are

(Weak Capacity & High Credit likely to impair the Banks’ capacity or willingness to meet their financial

Risk) commitments. B is considered speculative and weak capacity and is subject to

high credit risk.

CCC1, CCC2, CCC3 Commercial Banks rated 'CCC' are currently vulnerable, and are dependent on

Triple C favorable business, financial, and economic conditions to meet their financial

(Very Weak Capacity & Very commitments. CCC is judged to be of very weak standing and is subject to very

High Credit Risk) high credit risk.

CC

Commercial Banks rated 'CC' are currently highly vulnerable. CC is highly Double C

speculative and is likely in, or very near, default, with some prospect of recovery (Extremely Weak Capacity &

of principal and interest.

Extremely High Credit Risk)

C A 'C' rating is assigned to Banks that are currently highly vulnerable to non-

payment of obligations, or in the verge of default or faced with insolvency Single C

petition or bankruptcy petition or similar actions, but have not yet experienced a (Near to Default)

payment default with external support.

D 'D' is in default. The 'D' rating also will be used upon the filing of a bankruptcy

petition or the taking of a similar action if payments on an obligation are (Default)

jeopardized.

*Note: CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The

modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates

a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

Page | 174

CREDIT RATING SCALES AND DEFINITIONS - SHORTTERM: BANKS

RATING DEFINITION

ST-1

Commercial Banks rated in this category are considered to have the highest capacity for

timely repayment of obligations. Commercial Banks rated in this category are characterized

Highest Grade with excellent position in terms of liquidity, internal fund generation, and access to

alternative sources of funds.

ST-2

Commercial Banks rated in this category are considered to have strong capacity for timely

repayment. Commercial Banks rated in this category are characterized with commendable

High Grade position in terms of liquidity, internal fund generation, and access to alternative sources of

funds.

Commercial Banks rated in this category are considered to average capacity for timely

ST-3 repayment of obligations, although such capacity may impair by adverse changes in

business, economic, or financial conditions. Commercial Banks rated in this category are Average Grade characterized with satisfactory level of liquidity, internal fund generation, and access to

alternative sources of funds.

ST-4

Commercial Banks rated in this category are considered to have below average capacity for

timely repayment of obligations. Such capacity is highly susceptible to adverse changes in

Below Average business, economic, or financial conditions than for obligations in higher categories.

Commercial Banks rated in this category are characterized with average liquidity, internal Grade fund generation, and access to alternative sources of funds.

Commercial Banks rated in this category are considered to have inadequate capacity for

ST-5 timely repayment of obligations susceptible to adverse changes in business, economic, or

financial conditions. Commercial Banks rated in this category are characterized with risky Inadequate Grade position in terms of liquidity, internal fund generation, and access to alternative sources of

funds.

ST-6

Commercial Banks rated in this category are considered to have obligations which have a

high risk of default or which are currently in default. Commercial Banks rated in this

Lowest Grade category are characterized with risky position in terms of liquidity, internal fund generation,

and access to alternative sources of funds.

The Rating Committee of CRAB is the final authority to award a rating. The Rating Committee of CRAB is comprised of external

independence persons who are not members of the Board of the Company and they ensure the independence of rating.

© Copyright 2016, CREDIT RATING AGENCY OF BANGLADESH LIMITED ("CRAB"). All rights reserved. ALL INFORMATION CONTAINED

HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED,

REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT CRAB’S PRIOR WRITTEN CONSENT. All information contained herein is obtained by CRAB from sources believed by it to be accurate and reliable.

Because of the possibility of human or mechanical error as well as other factors, however, such information is provided “as is” without warranty

of any kind and CRAB, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness,

merchantability or fitness for any particular purpose of any such information. Under no circumstances shall CRAB have any liability to any person

or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other

circumstance or contingency within or outside the control of CRAB or any of its directors, officers, employees or agents in connection with the

procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct,

indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if CRAB is

advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and

financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as,

statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR

IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION

IS GIVEN OR MADE BY CRAB IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as

one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such

user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each

provider of credit support for, each security that it may consider purchasing, holding or selling.

Page | 175



Folio/BO Account No :

Name :

Address :

LETTER OF OFFER FOR RIGHTS ISSUE

Dear Shareholder (s)

We are pleased to inform you that the Board of Directors in its 676th meeting held on 20 June 2016 recommended

to issue Rights Shares at 1(R) : 1 i.e. 1 (one) Rights Share for 1 (one) share held at a price of BDT 10.00 (at par)

per share after considering the 12.00% Stock Dividend for the year 2015. The Board’s recommendation was

approved by the shareholders of the Bank in the 39th Annual General Meeting (AGM) held on 14 July 2016. After

considering the 12.00% Stock Dividend the total proposal for 563,821,907 Ordinary Shares of BDT 10.00 each

at an issue price of BDT 10.00 each at par totaling BDT 5,638,219,070.00 offered on the basis of 1(R): 1 (i.e. one

Rights Share for every existing one share held) on the record date. The purpose of issuance of Rights Shares is to

strengthen capital base of the Bank in order to comply with the Basel III capital accord, directed by Bangladesh

Bank. After issuing this proposed Rights Shares of BDT 5,638,219,070 total paid-up capital of the Bank will

increase to the extent of BDT 11,276,438,140.00 from BDT 5,638,219,070.00. As a registered Shareholder of

ordinary shares as on 12 April 2017, the record date, you are entitled to exercise your rights.

If you wish to accept the above Rights Share(s) in full or in part, you are required to submit completed Application

Form-A annexed hereto with necessary payments.

You may, however, renounce your rights in respect of all or part of your entitlement in favor of other(s) in which

case the Renunciation Form-B and Form-C annexed hereto shall be submitted duly filled in by you and the

renouncee(s) along with necessary payments.

The rights cannot be exercised for fraction of a share i.e. below full unit of a share.

All the payments for accepted shares are to be made in cash or by P.O/DD/Cheque @ BDT 10/- each per share

and to be deposited with any of the branches of Bankers to the Issue during Banking hours from 31 May 2017 to

29 June 2017 (both days inclusive). Any extension of time will be notified through national dailies. Payments

through P.O/DD/Cheque payable to "IFIC Bank Limited" and must be drawn on a Bank in the same town where

the Branch of Bankers to the Issue in which the application form has been submitted, is situated. It is to be noted

that all transactions above BDT 1.00 (one) lac must be effected through Demand Draft/Crossed Cheque/Pay

Orders.

The offer will be deemed to have been declined if completed Application Form-A and/or Renunciation Form-B

and Form-C with necessary payments have not been received by 29 June 2017 or by such later date as may be

notified through national dailies to that effect.

A self-explanatory Rights Share Offer Documents is attached for your kind information and evaluation.

Sd/-

M Shah Alam Sarwar

Managing Director

Page | 176

Application Form-A



Rights Issue of 563,821,907 Ordinary Shares of BDT 10.00 each at an issue price of BDT 10.00 each at par totaling BDT 5,638,219,070.00 offer to the Shareholders whose name appeared in the share register at the close of record date of 12 April 2017.

Last Date of Acceptance and Application: 29 June 2017

FORM OF ACCEPTANCE AND APPLICATION FOR SHARES

The Managing Director Dated:……./…..…/2017

IFIC BANK LIMITED Application Sl #:

Head Office: IFIC Tower, 61, Purana Paltan

G.P.O. Box: 2229, Dhaka-1000, Bangladesh (Bank’s Seal)

Dear Sir,

I/We apply for allotment of ordinary shares indicated below in response to your letter of Rights Offer. I/We hereby agree to accept the shares as may be allotted to me/us on the terms laid down in the letter of offer and enclose the necessary remittance @ BDT10.00 each in cash or by Draft/Pay order/Cheque no………………………………………………dated………………………………………………drawn on.

…………………………….……………………Bank…………………………….………………..Branch.

No. of Shares held at the close of

No. of

No. of Shares

Total Amount

Folio/BO Account No.

Shares

record date of 12 April 2017

Accepted

Paid

offered

Taka (In word) ............................. Yours faithfully,

1. Name (in block)……………………………………..…………................... Signature

Address:…………………….…………………………………………………………………………………….. Tel/ Mobile No.:……………………………………………………………..…………….....................................

2. Name (in block)………..…………….…….……………………................. Signature

Address:……………….……………………………………………………………………………......................... Tel/ Mobile No.:………………………………………………………………..……………...................................

BO Account No.

As per provision of the Depository Act, 1999 and regulations made there under, rights share shall only be issued in dematerialized condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form.

Note: Signature must be the same as was furnished to the Bank earlier. In case of incomplete application,

the offer will be deemed to have been declined. A/C payee Cheque/Draft/Pay-order to be issued in favour

of IFIC Bank Limited.

করুন

Page | 177

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY

Received BDT ………………………..……Taka (In word) …………………………..…………….................

only from Mr./Ms……………………………………………… folio/BO Account no …………………………..

for…..……….………………………no.(s) of rights shares of IFIC Bank Limited in Cash/ Pay Order/ Draft/

Cheque No………….…..…..………. dated……….……….................. of .………………………………Bank

…………………………....……Branch.

Application Sl. No. --------------- (Bank's Seal) Signature of Receiving Officer Date:

Page | 178

BANKERS TO THE ISSUE OF RIGHTS SHARE

IFIC Bank Limited

Ashulia Branch Mymensingh Branch

Bajitpur Branch Sherpur Branch

Banani Branch Agrabad Branch

Bangshal Branch Brahmanbaria Branch

Bashundhara Branch CDA Avenue Branch

Darus Salam Road Branch. Chawk Bazar Branch

Dhanmondi Branch Choumuhani Branch

Elephant Road Branch Comilla Branch

Faridpur Branch Cox's Bazar Branch

Garibe Newaz Avenue Feni Branch

Gazipur Chowrasta Branch. Khatunganj Branch

Gulshan Branch Laldighi Branch

Gulshan-Tejgaon Link Road Branch Rangamati Branch

Islampur Branch Shah Amanat Market

Kawran Bazar Branch Sheikh Mujib Road Branch

Keranigonj Branch Bogra Branch

Lalmatia Branch Chapai Nawabganj Branch

Malibagh Branch Joypurhat Branch

Manikgonj Branch Naogaon Branch

Mirpur Branch Pabna Branch

Mohakhali Branch Rajshahi Branch

Mohammadpur Br. Dinajpur Branch

Moulvibazar Branch Rangpur Branch

Narayanganj Branch Bagerhat Branch

Narsingdi Branch Jessore Branch

Naya Paltan Branch Khulna Branch

Pallabi Branch Kushita Branch

Principal Branch Noapara Branch

Progoti Sarani Branch Satkhira Branch

Rupganj Branch Barisal Branch

Savar Bazar Branch Bhola Branch

Shantinagar Branch Ambarkhana Branch

Shariatpur Branch Habiganj Branch

Stock Exchange Branch Moulvi Bazar (Dist.) Branch

Tangail Branch Sreemongal Branch

Tongi Branch Sylhet Branch

Uttara Branch Uposhohor Branch

Jamalpur Branch

Investment Corporation of Bangladesh (ICB)

Head Office, Dhaka Barisal Branch, Barisal

Chittagong Branch, Chittagong Sylhet Branch, Sylhet

Rajshahi Branch, Rajshahi Bogra Branch, Bogra

Khulna Branch, Khulna Local Office, Dhaka

Page | 179

Renunciation Form-B

IFIC BANK LIMITED Head Office: IFIC Tower, 61, Purana Paltan, G.P.O. Box: 2229, Dhaka-1000, Bangladesh Tel: 9563020, I-Phone PABX: 09666716250 Fax: 880-2- 9554102, Swift: IFIC BD DH

Rights Issue of 563,821,907 Ordinary Shares of BDT 10.00 each at an issue price of BDT 10.00 each at par

totaling BDT 5,638,219,070.00 offer to the Shareholders whose name appeared in the share register at the close of record date of 12 April 2017.

Last Date of Acceptance and Application: 29 June 2017

FORM OF RENUNCIATION

The Managing Director Dated:……../.……/2017

IFIC BANK LIMITED Head Office : IFIC Tower, 61, Purana Paltan, G.P.O. Box: 2229, Dhaka-1000, Bangladesh

Dear Sir,

I/We hereby renounce my/our rights to the shares offered to me/us as noted below in favor of person(s) accepting the same and signing in Application by Renouncee(s) and apply for allotment in his/her/their name(s).

Folio/BO Account No.

No. of Shares held at the close

No. of Shares

No. of Shares

of record date 12 April

offered

renounced

2017

Yours faithfully,

1. Name (in block)……………………………………..………….................Signature……………………………

Address:…………………….……………………………………..…………….......................................................

Tel/ Mobile No.:…………………….……………………………………………………..…………….................

2. Name (in block)……………………………………………………………Signature…………………………..

Address:……………….…………………………………………………….............................................................

Tel/ Mobile No.:…………………….………………………………………..…………….....................................

Name(s) of Renouncee (s)

BO A/C No

1. Name :

2. Name :

N.B. use photocopy in case of renouncement favoring more than 2 (two) persons

As per provision of the Depository Act, 1999 and regulations made there under, rights share shall only be issued in dematerialized condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary Owner (BO) Account number in the application form.


the offer will be deemed to have been declined

করুন

Page | 180

করুন

Renunciation Form-C



APPLICATION BY RENOUNCEE(S)

The Managing Director Dated:……./………./ 2017

IFIC BANK LIMITED Application Sl #: Head Office: IFIC Tower, 61, Purana Paltan

G.P.O. Box: 2229, Dhaka-1000, Bangladesh (Bank’s Seal)

Dear Sir,

As the shareholder(s) at pre-page has/have renounced his/her/their rights to the shares offered, in my/our favor,

I/We do hereby apply for the number of share noted above as renounced, by making payment of BDT

…………………………. being the value of …………….……………………Share @ BDT 10.00 each per

share.

Yours faithfully,

1 Signature: 2 Signature:

Name (in block letters): Name (in block letters):

S/O. D/O. W/O.: S/O. D/O. W/O.:

Address: Address:

BO

No.

BO

No.

N.B. use photocopy in case of renouncement favoring more than 2 (two) persons

Signature of the Renouncer(s): 1 2

As per provision of the Depository Act, 1999 and regulations made there under, rights share shall only be issued

in dematerialized condition. An applicant must apply for allotment of rights shares mentioning his/her Beneficiary

Owner (BO) Account number in the application form.


the offer will be deemed to have been declined. A/C payee Cheque/Draft/Pay-order to be issued in favour

of IFIC Bank Limited.

………………………………………………………………………………………………………………………

ACKNOWLEDGEMENT RECEIPT OF SHARE MONEY

Received BDT ………………………..……Taka (In word) …………………………..…………….................

only from Mr./Ms……………………………………………… folio/BO Account no …………………………..

for…..……….………………………no.(s) of rights shares of IFIC Bank Limited in Cash/ Pay Order/ Draft/

Cheque No………….…..…..………. dated……….……….................. of .………………………………Bank

…………………………....……Branch.

Application Sl. No. --------------- (Bank's Seal) Signature of Receiving Officer

Date: